[2017] JMCA Civ 27

JAMAICA

IN THE COURT OF APPEAL

SUPREME COURT CIVIL APPEAL NO 56/2012

BEFORE: THE HON MR JUSTICE PANTON P

THE HON MR JUSTICE DUKHARAN JA
THE HON MR JUSTICE BROOKS JA

BETWEEN WESTERN CEMENT CO LTD APPELLANT

AND NATIONAL INVESTMENT BANK

OF JAMAICA 1ST RESPONDENT

AND CLARENDON LIME COMPANY LTD 2ND RESPONDENT

AND LIMESTONE CORPORATION OF

JAMAICA LTD 3RD RESPONDENT

AND DR VINCENT LAWRENCE 4th RESPONDENT

AND KIRBY CLARKE

(Representative of the Estate of
Horace Clarke decd) 5th RESPONDENT

Lord Anthony Gifford QC, Mrs Tana'ania Small-Davis and Ms Sidia Smith
instructed by Livingston Alexander and Levy for the appellant

Charles Piper QC and Miss Marsha Locke instructed by Charles E Piper and
Associates for the 1st respondent

Garth McBean QC and Mrs Jennifer Scott-Taggart and Jonathan Morgan

instructed by DunnCox for 2nd, 3rd and 5th respondents

Michael Hylton QC and Miss Melissa McLeod instructed by Hylton Powell

Associates for the 4th Respondent

18, 19 March, 8, 9, 10 June 2015 and 31 July 2017

PANTON P

[1] I have read the reasons for judgment that have been written by my learned

brother Brooks JA, and wish to state that I agree with them in large measure and with

the manner in which he suggests the appeal should be determined. We differ in respect

of the counter-notice of appeal and I shall briefly state my reasons therefor.

[2] The ground stated in the counter-notice of appeal reads thus:

While the Learned Judge was correct in finding in favour of

the Defendants the Learned Judge erred in law in
considering the issue of disclosure by Mr Clarke to the Prime
Minister or Cabinet that he was a significant investor in CLCL
and that his company, Licojam, was used to solicit and
receive public funds for his private economic gain when the
issue of such disclosure did not arise on the pleadings filed
by the Claimants, nor were the pleadings amended during
the course of the trial to include this issue.

[3] From this it will be seen that the appellant Clarke is accepting the ruling in his

favour by the learned trial judge, but is complaining that the judge discussed the

question of disclosure without there being an issue raised. In my opinion, this is, with

the greatest respect, frivolity at its highest. A judge cannot be straight-jacketed in a

matter of this nature. He is entitled to make such comments as he sees fit in the

circumstances. The fact that he may make a comment which irks a successful party

does not give an entitlement to judgment on appeal.

[4] No authority is needed for me to say that a Cabinet Minister in Jamaica ought

not to use his public office for private gain. Where such a situation arises, it is not just

the Prime Minister or the Cabinet that is to be informed. Parliament is to be informed,

as that is the proper forum for the public to become aware. In the instant case, if

disclosure had in fact been made, it would be a matter of public record so the appellant

Clarke would have been expected to bring this to the attention of the Court at the

hearing of the appeal, to show that the learned judge was indeed wrong in his

reasoning and conclusion.

[5] In the circumstances, I am of the opinion that the counter-notice of appeal ought

to be dismissed on the ground that it is a very frivolous appeal, and costs ought to be

awarded to Western Cement.

[6] I wish to add that the trial judge did an excellent analysis of the huge mountain

of facts, and applied the law correctly. My learned brother Brooks JA has dealt

adequately with the issues and there is no reason for me to comment further.

DUKHARAN JA

[7] I have read the draft judgment of Brooks JA. I agree with his reasoning and

conclusion and have nothing further to add.

BROOKS JA

[8] The appellant, Western Cement Company Ltd (WCC) is dissatisfied with a

judgment by Sykes J, handed down on 16 March 2012. In his decision, the learned trial

judge gave judgment for the respondents herein on the claim, and judgment to the 1st

respondent, National Investment Bank of Jamaica (NIBJ), on its counter-claim against

WCC and three of WCCs directors, who are not parties to this appeal. The counter-

claim arose from the failure by WCC to repay financing, which NIBJ had provided to

WCC. Repayment had been guaranteed by WCCs directors, or, at least some of them.

[9] The formal order of Sykes Js judgment states, in part:

1. Judgment for the First, Second, Third, Fourth and

Fifth [Respondents] on the claim;

2. Judgment for [NIBJ] against [WCC and the directors]

in the sums of US$7,918,489.12 and J$9,533,955.14
on the counterclaim with interest on the sum of
US$582,398.69 at the rate of 13% per annum on the
sum of US$3,258,722.37 at the rate of 14% per
annum and on the sum of US$4,077,368.06 at the
rate of 12% per annum from June 1, 2010 to the date
of Judgment;

3. Stay of execution granted for six (6) weeks.

[10] WCC asserted, in its appeal, that the learned trial judge misapplied the relevant

law, particularly in relation to the tort of misfeasance in public office and to the duties

that NIBJ, as an investment banker, owed to WCC. WCC also contended that Sykes J

misunderstood some of the factual issues.

[11] The 5th respondent, Ms Kirby Clarke, has filed a counter-notice of appeal. She

asserted that the learned trial judge was in error in one of his findings in respect of the

matter. She contended that the issue on which the finding was made, was not one for

resolution by the learned trial judge.

WCCs case

[12] The backdrop to WCCs case is the industry concerned with the manufacture and

sale of calcium oxide, which is commonly known as lime or quicklime. Quicklime is

processed from limestone, which is to be found in abundance in Jamaica. The process

involves burning the limestone in a kiln. Quicklime is said to be a very versatile product.

It is, among its many purposes, an essential element in the processing of bauxite.

[13] The bauxite industry uses large quantities of quicklime. The main bauxite mining

and processing companies in Jamaica, at the relevant time, were Jamalco, Alcan and

Alpart. Those companies produced some of their quicklime needs, but also purchased

the commodity from outside sources. Jamalco was the largest consumer of quicklime in

Jamaica.

[14] WCC was engaged in the mining of limestone and the manufacture of quicklime.

The company conducted its operation in Maggoty in the parish of Saint Elizabeth. The

company was formed in 1992, but by June 2003 had been placed into receivership by

NIBJ, as a result of its failure to repay the debt owed to NIBJ.

[15] After being placed in receivership WCC, and two of its directors, filed a claim in

the Supreme Court against these respondents. Two other defendants were named in

the claim but WCC did not pursue the claim against those persons. WCCs directors

abandoned their claims against all the defendants.

[16] WCC alleged that the respondents conspired to ruin its business by preventing it,

by various means, from contracting with Jamalco, and promoting and preferring WCCs

competitor, Rugby Jamaica Lime and Minerals Limited (RJLML), for supplying quicklime

to Jamalco. WCC alleged that misfeasance in public office by certain of the respondents,

was utilised as part of the conspiracy.

[17] In the claim, WCC sought damages for economic loss suffered by it, due to, as it

alleged, the conspiracy and misfeasance. The charge of misfeasance in public office was

levelled at Mr Horace Clarke as well as the respondents NIBJ and Dr Vincent Lawrence.

The conspiracy charge was levelled at all the respondents, namely, those mentioned

above, as well as Clarendon Lime Company Limited (CLCL) and Limestone Corporation

of Jamaica Limited (Licojam).

[18] NIBJ was a limited liability company in which the majority shareholding was

owned by the Government of Jamaica. NIBJ was responsible, among other things, for

fostering economic growth in Jamaica. It was mandated to do so by providing financial

assistance to applicants. Where it provided financing it sometimes took, by way of

security, shares in the applicants enterprise. Its operations have since been taken over

by Development Bank of Jamaica.

[19] One of WCCs allegations against NIBJ was, in essence, that NIBJ entertained

WCCs 1996 application for financing, despite the fact that NIBJ was already involved in

financing another enterprise, CLCL, which also aspired to produce quicklime. WCC

contended that NIBJ, as part of the application process, required and received
confidential information from WCC, including production plans, market strategy and

product pricing. Further, WCC alleged, NIBJ concealed its involvement in CLCL, from

WCC. NIBJ went further, WCC contended, by appointing a representative to the

respective boards of directors of both WCC and CLCL. The result, according to WCC,

was that NIBJ breached a fiduciary duty owed to WCC.

[20] WCC asserted that NIBJ compounded those actions by deliberately delaying the

grant of a second application for financing that WCC had made to NIBJ. The timing was

critical, WCC alleged, in that it prevented WCC from placing itself in a position to enter

into a long-term supply contract with Jamalco. That delay was also designed, WCC

contended, to allow CLCL time to negotiate with Jamalco and have it commit to a long-

term purchase arrangement, thereby shutting WCC out and dooming it to failure.

[21] According to WCC, NIBJ also showed an improper preference to CLCL by way of

the manner of financing that it provided to CLCL. Whereas, NIBJ took ordinary shares

as its stake in CLCL, whereby it was risking its stake if CLCL failed, it took cumulative

preference shares in WCC, thereby requiring that it would be repaid its financing.

[22] The preferential treatment given to CLCL, WCC alleged, was due to CLCLs

powerful connections. For example, one of CLCLs directors was Dr Vincent Lawrence,

who was also a member of NIBJs board. Dr Lawrence was, at the material time, also a

director of a number of entities engaged in the bauxite industry. These entities

benefitted from public funding, either in part or entirely. He was a director of Clarendon

Alumina Production Limited (CAP). He also sat, as a representative for CAP, on the
executive committee of Jamalco, which was WCCs preferred customer. He had also

previously been a consultant to Licojam.

[23] WCC asserted that Dr Lawrence used his various connections and considerable

influence to further the private interests of Mr Clarke, another of CLCLs influential

connections. Mr Clarke was, for the period January 1995 to late 1997, the Minister of

Agriculture and Mining, under which the bauxite industry, fell. He also held 99.96% of

the shares in Licojam, which was a company engaged in limestone mining. WCC

contended that Mr Clarke improperly used his public office to secure personal benefit,

through Licojam, from public monies. It was WCCs contention that officers of NIBJ as

well as Dr Lawrence concealed Mr Clarkes interest in Licojam from the rest of NIBJs

board.

[24] Mr Clarke died during the course of the litigation in the court below. His estate is

here represented by the 5th respondent, Ms Kirby Clarke, mentioned above as having

filed a counter-notice of appeal.

[25] Licojam, was one of the promoters of CLCL. WCC asserted that, unlike the other

shareholders of CLCL, Licojam, was not obliged to pay cash for its stake (20%) in CLCL.

The reason proffered for the preferential treatment, WCC stated, was that the shares

were issued to Licojam in return for its promotion work done in respect of CLCL. It is

through that method, WCCs case asserted, that Mr Clarke received public funding for

his private venture for free (a term used by the learned trial judge in his excellent

outline of WCCs case).

[26] CLCL shareholders were also said to be a powerful group; a mixture of influential

public and private sector entities. They comprised all the respondents including, NIBJ,

National Development Bank (NDB), Jamaica Venture Fund Limited (JVF), Construction

Developers Associates Limited (CDA) and CAP. The monies from the public purse

invested in CLCL by the public sector companies (NIBJ, NDB, and CAP) and partially

through JVF, are said by WCC to have benefitted Licojam and, through Licojam, Mr

Clarke. The subscription agreement between the shareholders of CLCL was signed on

30 September 1995.

[27] It is in that context that WCC alleged that the respondents conspired to injure it

in its business, and that NIBJ, Dr Lawrence and Mr Clarke committed misfeasance in

their respective public roles. CLCL, Licojam and Mr Clarke, it was said, benefitted from

the various actions by all the respondents who conspired to block WCC from securing a

long-term contract with Jamalco for the off-take of WCCs quicklime and to secure such

a contract for RJLML. RJLML had been formed by CLCL and an overseas company

named Rugby International (Rugby). Rugby was the majority shareholder in RJLML, and

CLCL held 20% of the shares.

The case for the respondents

[28] The respondents accepted that:

a. Mr Clarke was the Minister of Agriculture and Mining from

January 1995 to late 1997;

 b. Dr Lawrence was a member of a number of boards of

public sector companies, including NIBJ, CAP and

Jamalco;

c. Both Licojam and NIBJ, among others, were shareholders

in CLCL;

d. CLCL was a principal of RJLML;

e. NIBJ granted a number of loans to WCC and that upon

the failure of WCC to service the loans, placed it in

receivership.

[29] The respondents all denied, however, that they, or any of them, conspired to

harm WCC in its business. NIBJ, Dr Lawrence and Mr Clarke all denied any wrongdoing

in respect of their respective public functions. The respondents contended that WCCs

demise was as a result of its bad planning, bad execution and bad luck.

A chronology of major events

[30] An analysis of the appeal requires an appreciation of the chronology of the

relevant events concerning the alleged commission of the tort of misfeasance in public

office. That chronology is as follows:

a. 1982: Licojam incorporated.

b. May 1992: WCC incorporated, and commences working

on constructing a quicklime plant.

c. July 1994: Alcoa, the operations principal of Jamalco,

leases limestone quarries to Licojam.

d. April 1995: Mr Clarke, the principal shareholder of

Licojam, appointed Minister of Mining and Agriculture.

His portfolio includes the mining of limestone and bauxite

and the production of alumina.

e. September 1995: At the instance of Licojam, CLCL

shareholders agreement signed.

f. October 1995: WCC borrows short-term money from a

consortium of banks.

g. November 1995: CLCL incorporated, and public monies

invested in it through NIBJ, JVF and CAP. It secures

Licojams contract for the provision of limestone to

Jamalco. CLCL has an additional aim of establishing a

quicklime plant.

h. January February 1996: CLCLs application for a Special

Mining Lease published in a nationally circulated

newspaper by the Ministry of Agriculture and Mining.

i. July 1996: Alumina producer, Alcan, seeks long-term

contract for WCC to supply quicklime, but WCC declines.

j. July 1996: CLCL board indicates possible joint venture

with Rugby Group in purchasing a quicklime plant.

k. August 1996: At a board meeting, CLCL acknowledges

WCCs existence and WCCs plans to sell quicklime to the

market at US$120.00 per metric tonne (pmt). The board

acknowledges the various potential suppliers of quicklime

and expresses the opinion that any company which

came into the [quicklime] marketplace first would get the

window of opportunity (volume 7, tab K, page 30 of the

record of appeal).

l. September 1996: WCC is in financial difficulty. It cannot

pay its debts or service the loan from the consortium of

banks. It approaches NIBJ for financing to pay some of

the debts in order to finish construction of the quicklime

plant.

m. November 1996: NIBJ approves equity financing for

WCC.

n. January - February 1997: NIBJ disburses the funds to

WCCs creditors.

o. January - February 1997: CLCL is in financial difficulty. It

cannot pay its debts. Its supply of limestone to Jamalco,

and consequently the income therefrom, had ceased. It

has no firm prospects for financing the proposed

 purchase of a quicklime plant. Its need for additional

financing is highlighted.

p. May 1997: WCC produces quicklime for the first time.

The plant ceases operating after the first day.

q. September - October 1997: WCC commences production

of quicklime, supplying at various times, Alcan, Jamalco

and Alpart.

r. November 1997: WCCs financial debt has ballooned and

it applies to NIBJ for additional financing to cure

calibration miscalculations and to broaden the

acceptability of its product so that it can be used by

Alcan and other customers. On 26 November 1997, NIBJ

appoints Mrs Dianne Wynter as its representative on the

board of directors of WCC.

s. December 1997: Jamalco issues a letter committing to

purchase quicklime exclusively from Rugby/CLCL for a

period of 15 years.

t. February 1998: Mr Clarke, no longer a government

minister, attends his first meeting of CLCLs board.

There is no precise date established by the evidence, but Mr Clarke, in his capacity as

Minister of Agriculture and Mining, toured WCCs premises between 1996 and 1997. In

his witness statement, he said he did not go into WCCs offices but viewed the plant
area only. He stated that the plant was not yet in operation. This would suggest that

the visit was before August 1997. Other relevant events were:

u. April 1998: NIBJ relaxes the terms of its financing to

WCC.

v. June 1998: Mr Clarke, as the new chairman of CLCL,

writes a letter disagreeing with a proposal made by Mr

Elworth Williams, a former Chairman of CLCLs board. In

concluding the letter Mr Clarke stated Our mission is to

proceed with all due haste. We have already yielded too

much ground to the competition.

w. July 1998: WCC re-submits its application to NIBJ for

financing, and asks for an increase in the financing that it

had requested.

x. September 1998: NIBJ approves WCCs application and

offers it a further investment of (US$448,000), as well

as conversion of the existing facility (US$350,000) to US

Dollar denominated 12% Preference Shares (Page 342

volume 4 of the record of appeal).

y. June 2000 RJLML commissions its quicklime plant.

z. December 2000 WCC applies for third tranche of

financing.
 aa. January 2001 WCC applies for further (a fourth

tranche) financing of US$350,000.00.

bb. February 2001 NIBJ approves WCCs third application

for financing.

cc. June 2002 WCCs kiln severely damaged by weather

system.

dd. June 2003 WCC placed in receivership.

The findings by Sykes J

[31] Sykes J rejected WCCs complaint that any of the respondents were guilty of

misfeasance in public office. The learned trial judge did, however, find that Mr Clarke

had behaved unlawfully, in that he misused his public office, as a minister of

government, for personal gain. Sykes J found that Mr Clarkes unlawful conduct was to

use his private business venture, Licojam, to solicit and receive public funds for his

private economic gain without disclosure, at the very least, to the Prime Minister or

Cabinet (paragraph [71] of the judgment). The learned judge found that Mr Clarke

knew that his conduct was unlawful (paragraph [73]).

[32] Despite that finding, the learned trial judge found that WCC had, nonetheless,

failed to prove that Mr Clarke knew, or was reckless to the fact, that his actions would

have caused damage to WCC or, at least, to a class of persons to which WCC belonged

(paragraph [75]). The learned trial judge also found that WCC had failed to prove that

Mr Clarkes unlawful act had caused its loss (paragraph [79]).

[33] Similarly, despite the various hats that Dr Lawrence wore in the several entities

involved in this case, the learned trial judge found that WCC had not proved that Dr

Lawrence knew of, or supported, Mr Clarkes concealment of his personal interests from

the Prime Minister or the Cabinet (paragraph [81]). Sykes J also found that there was

no evidence that Dr Lawrence possessed any intention to injure WCC (paragraph [82]).

[34] In respect of the issue of intent, the learned trial judge made two crucial findings

of fact. He found, firstly, that Dr Lawrence honestly believed that the quicklime market

was large enough to accommodate all the production of WCC, CLCL and the respective

outputs of the various bauxite companies (paragraph [82]). Secondly, the learned trial

judge accepted Dr Lawrences testimony that he did not exercise any influence over

Jamalcos commercial decisions; particularly that of the entry into a procurement

contract in respect of quicklime (paragraph [86]).

[35] In respect of NIBJ, the learned trial judge found that the allegation of a

deliberate omission from the board submissions, of the information as to the

shareholding and directorship of Licojam, would be akin to an allegation of fraud. In

light of that fact, he found that in the absence of the identification of any specific

person who prepared the submissions and recommendations to NIBJs board, WCCs

allegations against NIBJs employees would be equivocal (paragraph [93]). From that

finding he reasoned that the he could not conclude that bad faith as understood in this

tort [of misfeasance] has been proved (paragraph [93]).

[36] As far as the NIBJ board was concerned, Sykes J found that it could not be said

that Dr Lawrence had infected the board with any intention to carry out an unlawful act

or to injure WCC in its business. The learned trial judge stated that if it had not been

shown that Dr Lawrence had any intention to harm WCC, he could not possibly have

infected the board with such an intention (paragraph [94]).

[37] Sykes J, in assessing WCCs complaint that NIBJ had breached a fiduciary duty

owed to WCC, found that even before WCC had made its first loan application, NIBJ

already knew that WCCs proposed product was overpriced. He ruled that NIBJ could

not owe a fiduciary duty to WCC, merely by way of their banking relationship

(paragraph [140]). NIBJ, therefore, had no duty to inform WCC, at the time of that first

application, of the defects in its pricing strategy (paragraph [127]). He found, however,

that when NIBJ later appointed a representative to WCCs board, it assumed a fiduciary

duty to WCC and an obligation to give WCC its best advice (paragraph [188]). NIBJs

failure, at that time, to inform WCC of those defects, he found, amounted to a breach

of fiduciary duty (paragraph [188]).

[38] That breach, the learned trial judge found, did not, however, cause WCC any

loss. He found that WCC was, by then, already committed to a path leading, save for an

injection of substantial additional capital, to financial collapse, and could not have been

saved by any revelation that NIBJ could have made (paragraph [193]). WCCs losses,

he found, were caused by the cumulative effect of (a) the incorrect calibration of the
plant; (b) the high debt servicing costs; (c) the cancellation of the quicklime contract by

Jamalco and (d) the various mishaps at the factory (paragraph [193]).

[39] On WCCs charge of a conspiracy to injure it in its business, the learned trial

judge found that WCC had failed on two bases. Firstly, he found that in the absence of

any proof of misfeasance in public office, it could not be said that there was a

conspiracy to do a lawful act, that is, construct a quicklime plant, by unlawful means,

namely the misfeasance alleged. Secondly, he found, by logical extension, that WCC

had failed to show that there had been any unlawful act committed and therefore it had

failed to show that the tort of conspiracy to injure had been committed. It was

necessary, he found, that where an unlawful purpose is alleged, it must be proved that

there was also a conspiracy as well as damage. WCC, he held, had failed to prove that

there was any conspiracy or, indeed any causal connection between the [respondents]

conduct and WCCs loss (paragraph [215]).

The appeal

[40] WCC filed numerous grounds of appeal. They are listed below:

1. The learned trial judge erred in law and on the facts

in that he failed to appreciate that the 5th
Respondent's act of misfeasance necessarily involved
the displacement of market share of competitors or
some part thereof and therefore the requirement that
the 1st Respondent knew that his actions would
possibly injure the claimant or was reckless as to
whether his action would injure the claimant or a
class of persons to which the Appellant belonged, was
made out.
2. The learned trial judge erred in law and on the facts
in that he failed to appreciate that the size and
capacity of a market cannot be separated from the
supply[,] the demand and the price at which product
is sold and at which purchasers are prepared to buy.

3. The learned trial judge failed to appreciate that the

only viable market for lime available to the Appellant
at the price and in the quantity necessary for its
survival was the JAMALCO market.

4. The learned trial judge failed to appreciate that the

effect of the 5th Respondent's misfeasance in public
office was to cause the loss of the JAMALCO market
and to depress the price projected by the Appellant as
well as to deprive the Appellant of the possibility of a
long term off take contract.

5. The learned trial judge failed to appreciate that it was

a reasonable foreseeable result of the 5th
Respondent's misfeasance in public office that
JAMALCO's exclusive long term off take contract
would be unavailable and to deprive any other
competitor and in particular the Appellant of it.

6. The learned trial judge failed to pay any or any

sufficient regard to the evidence of the 5th
Respondent in which by letter dated June 17, l998 he
stated that the 2nd Respondent had yielded too much
ground to the competition. The learned trial judge
failed to appreciate that this clear reference to the
Appellant indicated that the 5th Respondent and those
conspiring with him were well aware of the effect the
act of misfeasance would have and on whom.

7. The learned trial judge paid no or not enough regard

to the evidence of David Wong Ken and Elworth
Williams.

8. The learned trial judge failed to appreciate that

having found the 5th Respondent guilty of
misfeasance in public office it necessarily followed
that the 2nd and 3rd Respondents were conspirators in
that they actively joined in the lime producing venture
 which to their knowledge secured a private profit to
the 5th Respondent and was thus unlawful.

9. The learned trial judge erred in law and in his analysis

of the evidence when concluding that there was no
evidence to support the fact that the 4th Respondent
was also liable for misfeasance in public office and for
conspiracy.

10. The learned trial judge paid no or no sufficient regard

to the 4th Respondent's admitted knowledge of the
Ministers involvement and personal gain and also his
failure to disclose the Minister's personal involvement.

11. The learned trial judge also failed to appreciate that

the only inference to be drawn from the 4th
Respondent's presence on the several boards and his
interventions in certain meetings was that he aided
and abetted and/or was guilty of misfeasance in
public office and was a co-conspirator in that regard.

12. The learned trial judge erred in his failure to

appreciate that if, as he found, a fiduciary duty
existed when the 1st Respondent appointed Directors
to the Board of the Appellant then it necessarily
meant that a fiduciary relationship existed from the
moment the 1st Respondent obtained the right to
appoint directors to the Board of the Appellant.

13. The learned trial judge therefore erred in law when

he decided that no fiduciary duty arose prior to the
actual appointment of directors to the Board of the
Appellant.

14. The learned trial judge failed to appreciate the

distinction between a commercial bank involving the
usual lender borrower relationship on the one hand
and an investment bank which was publicly owned
and which provided funding by way of an investment
in return for redeemable preference shares on the
other.

15. The learned trial judge erred in his application of the

law in that he failed to appreciate that the
 circumstances of the instant case displaced the
general rule that a banker customer relationship did
not result in a fiduciary relationship.

16. The learned trial judge failed to appreciate that the

special circumstances in this matter arose from the
uncontradicted evidence that:

(a) The 1st Respondent was a publicly funded

investment bank, one of whose purposes was
the fostering of the development of industry in
Jamaica.
(b) The 1st Respondent participated in the
preparation of the Appellants project
document and its projections prior to the grant
of the first and second loans.
(c) The project document and projections were
therefore the joint effort of the Appellant and
the 1st Respondent.
(d) The 1st Respondent was an investor in the
Appellant's venture because the loan was by
way of purchase of redeemable shares in the
Appellant.
(e) The Appellant had therefore relied upon the 1st
Respondent and was also entitled to expect
loyalty and uberima fides by virtue of the fact
that the 1st Respondent was partnering in the
venture when it purchased the Appellant's
shares.

17. The learned trial judge failed to appreciate that the

overwhelming weight of the evidence supported a
finding of a breach of fiduciary duty at the time of the
first and second loans because:

(a) The Appellant relied on the 1st Respondent for

the preparation of its project documentation
and projections.
(b) The Appellant was entitled to assume that the
1st Respondent would not put any fact in that
project document which it had reasonable
cause to suspect were not accurate.
(c) The important facts as to the price available
and the available market at that price were
 aspects of the project document which the 1st
Respondent's technocrats put forward as
accurate at a time when the 1st Respondent's
directors knew that they were not likely to be
achieved.
(d) The 1st Defendant's loan was by way of an
investment in the Appellant in return for shares
which also gave the 1st Respondent a right to
appoint two (2) directors.
(e) This right to appoint directors demonstrates
the basis of the expectation in the Appellant
that a relationship of trust and confidence
existed.
(f) The 1st Respondent failed to disclose to the
Appellant that it had already invested in a
project in the same industry which was
targeting the same market and which intended
to offer a better price and the principals of
which were highly placed and well connected
in the industry.

18. The learned trial judge erred in law when he

concluded that there was no evidence to support the
fact that the 1st Respondent's breach of fiduciary duty
caused the Appellant's loss.

19. The learned trial judge ignored and/or overlooked

and/or failed to take into account the unchallenged
evidence of the Appellant's Managing Director that
had he been aware of the nature of the competition
facing the Appellant he would have cut his losses and
sold out or he would have sought a joint venture
partner.

20. The learned trial judge failed to appreciate that the

disbursement of the second loan occurred after a
director had been appointed by the 1st Respondent to
the Board of the Appellant.

21. The learned trial judge erred in law and fact in that
he failed to appreciate that the grant of the second
loan in circumstances where a long term contract at a
viable price from JAMALCO was impossible meant that
the 1st Respondent was increasing the Appellants
 debt burden whilst knowing that its prospect of ever
repaying that debt was very remote. To the 1st
Respondent's knowledge JAMALCO was already
committed or about to be committed to a long term
contract with the Minister's venture, and at a price
which was lower than that at which the Appellant
could offer with any reasonable prospect of remaining
viable.

22. The learned trial judge failed to appreciate therefore

that even on his own erroneous finding that a breach
of fiduciary duty occurred only when Directors were
appointed, the failure to disclose the existence of a
relationship with the competitor by the 1st
Respondent deprived the Appellant of the opportunity
to either,

(a) cut its losses and sell; or,

(b) seek a joint venture Partner; or
(c) not take the 1st Respondents loan and
therefore not increase its liabilities.

23. The learned trial judge erred in law and his analysis
of the evidence in that he failed to appreciate that the
other factors such as (a) incorrect information about
the size material Windalco needed, (b) industrial
disputes, (c) dust control, (d) absence of an engineer,
all made the reliance on the 1st Respondent's integrity
and honesty all the more important.

24. These factors made the need for the acquisition of

the JAMALCO market at the price projected all the
more important if the Appellant was to remain viable
and this to the knowledge of the 1st Respondent.

25. The learned trial judge erred in law and fact and
failed to appreciate that when the 1st Respondent
granted the second loan without disclosing its
involvement in a venture which had or was about to
secure the JAMALCO market and which was promising
a price below that offered by the Appellant, it ensured
that the Appellant would fail and plunged it further
into debt. The 1st Respondent deprived the Appellant
 at the very least of the possibility of cutting losses
and exiting the industry with a reduced liability.

26. The learned trial judge ought therefore to have

awarded damages consequent on his finding that a
breach of fiduciary duty occurred and that there had
been misfeasance in public office.

27. The learned trial judge erred in his failure to hold that
a fiduciary relationship existed from the time of the
first loan and to award damages and grant a remedy
to the Appellant.

28. The learned trial judge erred in his failure to award

damages for conspiracy, misfeasance in public office
and for breach of fiduciary duty.

The counter-notice of appeal

[41] In her counter-notice, Ms Kirby complained that the learned judge made a

finding against Mr Clarke on an issue which was not before the court. The counter-

notice states:

While the Learned Judge was correct in finding in favour of

the Defendants the Learned Judge erred in law in
considering the issue of disclosure by Mr Clarke to the Prime
Minister or Cabinet that he was a significant investor in CLCL
and that his company, Licojam, was used to solicit and
receive public funds for his private economic gain when the
issue of such disclosure did not arise on the pleadings filed
by the Claimants, nor were the pleadings amended during
the course of the trial to include this issue.

The method of analysis

[42] The issue of misfeasance in public office is central to both the appeal and

counter-notice of appeal. For that reason, the law regarding that tort will first be
outlined. An understanding of the relevant law will be essential to understanding the

learned trial judges decision and to assessing the appeal and the counter-notice.

[43] The analysis of the appeal will, thereafter, be done by grouping the various

grounds of appeal according to the issues that they raise. Counsel for the appellant did

group some of the grounds for convenience, and that grouping proved helpful to

understanding the issues. As the validity of the learned trial judges findings on the

issue raised by the counter-notice of appeal, is central to some of the grounds raised in

the appeal, the counter-notice will be dealt with before the various grounds of appeal.

Misfeasance in public office

[44] Recognition of the tort of misfeasance in public office is of some vintage, but

there is no recorded case of any claim, based on it, having been previously litigated in

this jurisdiction. The most comprehensive learning on the tort has been set out in the

seminal decision of Clarke J (as he then was) in Three Rivers District Council and

others v Bank of England (No 3) [1996] 3 All ER 558, and, even more importantly in

the judgment of the House of Lords ([2001] UKHL 16; [2000] 3 All ER 1), in the

terminal appeal from Clarke Js decision in that case. Their Lordships praised the lucid

way in which Clarke J explained the tort.

[45] From that learning, it may be gleaned that the tort is based on the improper use

of the power vested in a public office. The tort springs from the principle that, at least

under Westminster-style democracies, such as that practised in this country, such

power is conferred solely for use to the benefit of the public. Public officials should not
use the power of their offices for ulterior or improper purposes. They are, therefore,

precluded from using such offices for personal gain, unless with the full knowledge and

permission of the authority allowed to grant that permission.

[46] Public officials are similarly precluded from using the power of their offices to

intentionally cause injury to any member of the public. With regard to the intention

required, the tort is subdivided into two distinct alternative elements, namely targeted

malice and untargeted malice. In the former manifestation, a public official uses a

power granted to the office to intentionally injure a specific person or class of persons.

The second manifestation of the tort occurs where the official commits an unauthorised

act, which causes injury to a specific person or class of persons.

[47] In both manifestations of the tort, the action of the official must be shown to

have been accompanied by a mental element. The official must be shown not to have

acted in good faith in respect of the validity of the act, that is, the official knew that the

act was unlawful, or wilfully disregarded the risk that it was unlawful. The term

unlawful applies to both manifestations. Not only does it refer to unauthorised acts

but it reflects on carrying out an authorised act in an unauthorised way. It is important

to note that mere negligence is not sufficient to constitute the tort. The official must

also be shown to have had an intention to injure, or at least, a recklessness as to

whether or not the action would injure an individual or class of persons. In other words,

the official must be shown to have:

a. had the intention to cause injury;

 b. known, or must have known, that the action would

probably have caused the damage complained about; or,

c. been consciously indifferent as to the risk.

[48] In the case of targeted malice, the official must be shown to have deliberately

set out to injure the individual or the class of persons. In the case of untargeted malice,

the official must be shown to have been aware that he or she did not have the power to

act as was purportedly done and, at least, that the injury complained of would be the

probable result of that action. The term malice does not refer to spite or ill-will but to

the intention to do that which was done.

[49] The tort is not restricted to committal by natural persons but extends to public

bodies as well. Both Three Rivers and Jones v Swansea City Council [1990] 3 All

ER 737 are examples of complaints against a public body. In Three Rivers, the

complaint was that the Bank of England (BOE) had caused losses to depositors in the

ill-fated Bank of Credit and Commerce International (BCCI). It was alleged that the

BOEs officials had acted in bad faith by granting a banking licence to BCCI, or by failing

to withdraw the licence when it was clear that BCCIs senior management had been

engaged in a fraud, on a massive scale, perpetrated against the depositors. The House

of Lords ruled that the tort had been sufficiently set out in the particulars of claim to

allow the case to proceed to trial.

[50] In Jones, it was alleged that the county council, on solely political bases,

improperly voted to rescind permission, which had been granted to the claimant, to
utilise, as a club, premises that the council had previously leased to her. The House of

Lords found that the plaintiff would have had a good cause of action against the

council for misfeasance in a public office if she had alleged and proved that a majority

of the councillors present, having voted for the resolution, had done so with the object

of damaging her (headnote). It was possible, therefore, to have had a good cause of

action for misfeasance in public office against a public body such as the county council.

[51] Where the complaint is laid against a public body, it must be shown that the

mental element was exercised by an identifiable human agent. In Chagos Islanders v

Attorney General and Another [2004] EWCA Civ 997, the English Court of Appeal

ruled that the claimants could not succeed on appeal on the aspect of misfeasance in

public office because they would be unable to point to any officer who knew of the

illegality of the actions of the public body (paragraph 28 of the judgment).

[52] A claim for misfeasance in public office requires the claimant to also show that

he was the target of, or prejudiced by, the improper or unlawful act of the official,

whether specifically or as one of a class of persons. The tort is of a class of torts which

are deemed actions on the case, that is, the claimant must not only show that he was

affected by the officials action, but that he suffered loss as a result of that action. The

claimant must prove that loss. Lord Hobhouse, in Three Rivers, succinctly explained

this aspect of the tort, at page 45 of the report of the case:

The tort is historically an action on the case. It is not

generally actionable by any member of the public. The
plaintiff must have suffered special damage in the sense of
loss or injury which is specific to him and which is not being
 suffered in common with the public in general.The plaintiff
has to be complaining of some loss or damage to him which
completes the special connection between him and the
official's act.

[53] The tort has been examined at the highest level in the United Kingdom (Three

Rivers), in the Commonwealth, by way of the Privy Council (Dunlop v Woolahra

Municipal Council [1982] AC 158, and in the Caribbean Court of Justice (Marin and

Coye v The Attorney General of Belize [2011] CCJ 9 (AJ)). In Dunlop, the Privy

Council asserted that misfeasance by a public officer in the discharge of his public

duties was a well-established tort, but that it required the claimant to prove malice on

the part of that officer. In Marin, the majority of the court held that the state could

properly claim as being the victim of the officials misfeasance in public office.

[54] In his judgment, Sykes J, characteristically, comprehensively set out the juridical

basis of the tort and explained the requirements placed on a party claiming damages on

that basis. Neither WCC nor NIBJ complained about the learned trial judges exposition

of the relevant law. They, instead, complained about his application of the law to the

facts of the case.

Counter-notice of appeal the validity of the finding that Mr Clarke acted

unlawfully

[55] The learned trial judge found that Mr Clarke, while he was the minister of

government responsible for mining, had full knowledge of the activities of Licojam, the

company in which he held 99.97% of the shares. Those activities involved, during the

time that he was the minister, an approach to NIBJ for its participation in the formation
of CLCL and its provision of equity funding for CLCL. The learned trial judge found, at

paragraph [71] of the judgment, that, by those activities, Mr Clarke unlawfully used

Licojam to solicit and receive public funds for his private economic gain without

disclosure, at the very least, to the Prime Minister or Cabinet. Sykes J also held that Mr

Clarke could not have honestly believed that it was lawful to seek to use public funds

in this way (paragraph [71]).

[56] Although the cabinet submission requesting the approval of public funding for

the various NIBJ projects (including the investment in CLCL) was not placed in

evidence, Sykes J inferred that the submission comprised an itemised list of

investments (paragraph [51]). That itemised list, the learned trial judge reasoned,

would have stipulated that $10,500,000.00 was for investment in CLCL. Mr Clarke was a

part of the Cabinet at that time. He knew, at the time, the learned trial judge found,

that Licojam had approached a number of government entities for money. Despite

that, Sykes J noted, Mr Clarke had not provided any evidence that he had declared his

interest in that investment. The learned trial judge said, in part, at paragraph [57] of

his judgment:

There was no evidence that Mr Clarke told the Prime

Minister or Cabinet that he was a significant investor in
CLCL.

[57] The learned trial judge opined that not only should there have been disclosure of

Mr Clarkes personal interest in the CLCL venture, but Mr Clarke should have secured

permission for the provision of public funds in such a venture. Sykes J went on to say
that [a]t the very least, such permission if granted should be made public (paragraph

[71]).

[58] The complaint by Ms Kirby Clarke is that the aspect of disclosure of the

solicitation or receipt of public funding was not raised by WCC in its statement of case

against Mr Clarke, in respect of the issue of misfeasance in public office. Mr McBean QC

submitted, on her behalf, that since the issue was not raised against Mr Clarke, it was

not an issue upon which the learned trial judge could properly have made any finding,

much more, the findings that he in fact made.

[59] WCC asserted that the issue was indeed raised in its particulars of claim and was

addressed in opening speeches by learned counsel who appeared for it at the trial. Lord

Gifford QC, for WCC, stressed the fact that the term secretly was used in the

particulars of claim. Learned Queens Counsel further submitted that none of the

respondents complained that the matter of non-disclosure, as an aspect of misfeasance,

had not been raised in the pleadings as an issue in respect of Mr Clarke. He argued that

the respondents would not have been taken by surprise by the learned judges ruling on

the point.

[60] In assessing these issues, it is to be noted that there is guidance to be gleaned

from Blackstones Civil Practice 2016. At paragraph 24.20 of that work, the learned

editors state the purpose of a statement of claim thus:

A good claim or defence should enable the parties and the

court to narrow down and identify the central issues in
dispute. This has always been the case. For example, a
 defendant is entitled to know not merely the cause of
action against him, but also the manner in which it is
alleged that he was in breach of his duty, thereby
causing the claimant to seek redress against him. To achieve
that objective requires no more than a properly detailed set
of particulars (as opposed to evidence), thereby allowing
him to set out his case in response. (Emphasis supplied)

[61] The learned editors point out at paragraph 24.24, that if the issue has not been

included in a statement of case then a trial judge should not normally make a finding in

respect of it. The trial judge may do so, however, if the parties had so dealt with the

issue during the trial that there would be no injustice in making such a finding. They

state:

A judge should not normally make a finding of fact on an

issue which depends on evidence and which has not been
raised in statements of case, so that all parties did not have
a proper opportunity to address it, even if it was raised in
correspondence after statements of case have been served
(Sivanandan v Executive Committee of Hackney Action for
Racial Equality [2002] EWCA Civ 111, LTL 25/1/2002).
However, if a factual issue has been adequately dealt
with at trial and is clearly regarded by all parties as a
live issue which is crucial to the case, the judge is
entitled to make a finding of fact, even if the issue
was not raised in the statements of case, which could
have been amended during the trial (Slater v
Buckinghamshire County Council [2004] EWCA Civ 1478, LTL
10/11/2004).

An appeal against a decision on an unpleaded basis may

therefore be dismissed if there is no real injustice in that the
evidence would be the same on the new basis of the claim
(Whitecap Leisure Ltd v John H. Rundle Ltd [2008] EWCA
Civ 429, [2008] 2 Lloyds Rep 216). (Emphasis supplied)
[62] An examination of WCCs claim form shows that WCC did allege improper gain by

Mr Clarke while he held public office. Paragraph 2 of the further amended claim form

states that WCC claimed, among other things:

Exemplary damages against the [NIBJ, Dr Lawrence and Mr

Clarke] or any or all of them for conspiracy, deceit, breach of
fiduciary duty and/or misfeasance in public office for the
purpose of damaging the Claimants and/or making a
profit for any or all of the Defendants and/or to
secure the interests of the Defendants or any or all of
them. (Emphasis supplied)

[63] The elements of the conspiracy and misfeasance in public office, with a view to

damaging WCC, was extensively set out and expanded upon in WCCs further amended

particulars of claim. A pleading that Mr Clarke had improperly profited from his office

was, however, only tangentially mentioned. This was done at paragraph 71 of the

document. It said:

[NIBJ] acted in concert with [Dr Lawrence] and [Mr Clarke]

as public officials in order to promote the financial gain
of [Mr Clarke] in promoting and securing profit for
him through his interests in [CLCL] and [Licojam]. In
the premises the Claimants claim exemplary damages
against [NIBJ], [Dr Lawrence] and [Mr Clarke] or any or all
of them. (Emphasis supplied)

WCC did not provide any particulars for those assertions.

[64] The issue of non-disclosure was not mentioned. At paragraph 50 of the further

amended particulars of claim, WCC averred, in part:

Lawrence, free of charge advised Clarke and Licojam on a

project. Thereafter Clarendon Lime was established secretly
in August 1995. It was established with the purpose of
obtaining the contract to supply quicklime to the
 bauxite/alumina companies for which government had a
50% interest. (Emphasis supplied)

[65] The response to the assertions of improper profiting, in the joint defence filed on

behalf of CLCL, Licojam and Mr Clarke, was a simple denial. It would be unfair to those

respondents to characterise that response as a bare denial, considering the

connotations of that term. Given the absence of any details in the amended particulars

of claim, it would be unreasonable to have expected any greater detail from these

respondents. It would, likewise, be unfair to them to say that the use of the word

secretly, in the context in which it was used, raised the issue of non-disclosure to the

Cabinet and Parliament of the investment of public funds into a venture in which a

cabinet minister had a personal interest.

[66] It cannot be said, from the pleadings, that the issue of non-disclosure by Mr

Clarke to the Prime Minister or to the Cabinet, had been raised by WCC or joined

between the parties. Nonetheless, the learned trial judge found, that this was an

important aspect of the case. He said, in part, at paragraph [57]:

Thus the real issue is whether his omission to inform the

Prime Minister and Cabinet of his private economic interest
in CLCL with the consequence that he was part of the
Cabinet that voted public funds to be used for his private
interest is sufficient to come within the tort of misfeasance
in public office.

[67] As the point had not been adequately raised on the statements of case, it must

be determined whether it was raised in evidence, and if it was raised in the evidence,

the extent to which it was addressed, and how it was regarded by the parties. Evidence
was by way of witness statements as well as oral responses during examination and

cross-examination during the trial.

[68] Mr David Wong Ken, in giving evidence for WCC, stated at paragraph 88 of his

first witness statement that CLCL was created for [the] special purpose of benefitting

Horace Clarke. He relied, for that assertion, on the contents of an agreement between

CLCLs shareholders. The document, he contended, included provisions that gave

Licojam a preferred status among CLCLs shareholders. According to Mr Wong Ken:

88.8 [CLCL] which used cheap public funding was created

and functioned as Clarkes personal property. The
equity input of Clarke proved worthless.

It must be borne in mind that Mr Clarke was appointed the Minister of Agriculture and

Mining in April 1995 and CLCL was incorporated in August 1995, that is, during his

tenure as minister.

[69] Mr Wong Ken accused Dr Lawrence and another NIBJ director, Mr Nathan

Richards, as overarching for Mr Clarke on NIBJs board of directors. Mr Wong Ken

supported that statement, in part, by reference to a March 1998 assertion by a director

of Licojam, that Mr Clarke, Dr Lawrence and others, had made several interventions

on behalf of CLCL. It must be noted, however, that Mr Clarke had, by the time of that

directors assertion, already demitted ministerial office, having done so in late 1997.

[70] Nowhere, in any of his witness statements, did Mr Wong Ken raise the issue of a

failure by Mr Clarke to disclose to the Prime Minister or to the Cabinet, an interest in the
venture into which public funds were about to be invested, by way of a shareholding in

CLCL.

[71] Mr Clarke filed two witness statements before his demise. In the second, which

was filed on 21 December 2009 (page 313 of volume 2 of the record of appeal), he

addressed the allegations of Licojam having benefitted from the formation of CLCL

without having made any valuable input to it. He contested the validity of those

allegations. He said that CLCL benefitted from the extensive research work that Licojam

had previously conducted into quicklime and its by-products. He further stated that

Licojam, not only had an established relationship with Jamalco, from 1994, but also

held a lease of a stone quarry owned by Jamalco. It was envisioned that Licojam would

supply limestone, from that quarry, to Jamalco for use in Jamalcos quicklime kiln. Mr

Clarke stated that as part of its input to CLCL, Licojam transferred its assets, including

the quarry lease, to CLCL.

[72] Mr Clarke further stated that Licojam was not the only beneficiary of the CLCL

enterprise. He said that all of CLCLs shareholders benefited from CLCL, including its

sale of its equity in RJLML, which had eventually secured a long term off-take contract

with Jamalco, for quicklime.

[73] He contended that WCCs demise was due to its failure to properly assess the

market and to incorrect economic decisions. He denied ever having acted with the

intention to harm WCC. He contended that, at all times, he acted within his powers as a

minister of government and in good faith.

[74] As Sykes J pointed out in his judgment, Mr Clarke did not address, in his witness

statement, the issue of a declaration of interest in respect of the cabinet submission

concerning monies from which CLCL was to benefit. Mr Clarke had, however, died by

the time the trial had started. There was therefore, no opportunity for him to either

expand on his witness statement or to be cross-examined on the issue.

[75] The next question, then, is whether the issue was raised during the trial so as to

require adjudication by the learned trial judge. It was raised in the opening of WCCs

case before Sykes J. Lord Gifford, who addressed the learned trial judge in that

opening, said, in part:

[NIBJ, Dr Lawrence, Mr Clarke] and others were scheming to

ensure that they took over that market. And the means
which they used on the part of [NIBJ] was the breach of the
duty on the part of [Mr Clarke] was sponsoring or causing
these companies to sponsor [CLCLs] establishment without
regarding disclosure to anyone when he had personal
interest (Volume A, tab A, page 34 of the record of
appeal)

Lord Gifford submitted to the learned trial judge that Mr Clarke owed a duty of

disclosure to the public, and in particular to WCC. He based that submission on the fact

that Mr Clarke, as minister of mining, was the owner of a company that had received

the benefit of public monies and secured a contract with Jamalco. Those factors, he

submitted, prevented WCC from retaining Jamalco as a customer. Learned Queens

Counsel went on to submit that all that was achieved without disclosure of any kind

that I know (Volume A, Tab A page 37 of the record of appeal).

[76] There was no documentary evidence presented to Sykes J of any disclosure to

NIBJ, to the ministry of finance, which provided the funds invested in CLCL, or to the

Cabinet, of Mr Clarkes interest in Licojam. Indeed, it is important to note that the

cabinet submission, resulting in the approval of the funds for investment in CLCL, was

not placed in evidence. That absence led to the learned trial judge drawing the

inference that the item concerning the funds to be invested by NIBJ, specifically

mentioned the CLCL project.

[77] Mr Wong Ken spoke to the issue of misfeasance in his oral testimony. It occurred

in answers given in cross-examination by counsel appearing at the trial for CLCL,

Licojam and Mr Clarke. The cross-examination on the point was very brief. It is

recorded at Volume C, Tab A, pages 16-17 of the record of appeal, as follows:

Q. One of the allegations against Horace Clarke is

misfeasance in public office.

A. Yes I think he used his public office for private gain

Q. What evidence [sic]?

A. Documents from Registrar of Companies. While in

public office controlling my market or one we
competing for [sic], having people under his
jurisdiction on various boards, yes.

Q. None of these difficulties were part of your

conspiracy?

A. I disagree.

Q. Mr. Clarke not guilty of misfeasance in public office?

A. I disagree.
It can hardly be said that that exchange dealt with the issue of non-disclosure of a

personal interest in CLCL. Nor can it be said that there was any evidence adduced as to

what Mr Clarke had done to secure a personal benefit from his public office.

[78] Mr Milverton Reynolds, the managing director of the Development Bank of

Jamaica (which had taken over NIBJs operations), in answers given in cross-

examination, did address the issue of non-disclosure. It was, however, from the point of

view of an obligation by NIBJ to make a disclosure. Mr Reynolds was speaking from a

position of hindsight, as he was never an employee or board-member of NIBJ. He also

spoke to what he expected as being good practice in circumstances such as those

surrounding NIBJs investing in the CLCL project.

[79] Mr Reynolds stated that good practice required NIBJ to inquire who were the

shareholders and directors of companies, which had approached it for equity financing.

He said that good practice would also require NIBJ to disclose to its portfolio minister

that a serving cabinet minister had an interest in such a company. Mr Reynolds further

stated that there was no record that NIBJ had disclosed to its portfolio minister that Mr

Clarke had an interest in the CLCL project, in which NIBJ intended to invest public

funds. On being further questioned on the point of disclosure, Mr Reynolds agreed with

the suggestion that where a Cabinet Ministers company is entering into a joint venture

with the injection of public funds and being given a stake in exchange for services, that

is a matter which should be reported to parliament (Volume B tab a page 5 of the

record of appeal).
[80] Dr Lawrence was also questioned, in cross-examination, about the matter of

disclosure. He, however, testified that he had no specific knowledge of Mr Clarkes

interest in Licojam, although he did agree that he knew Mr Clarke did have an interest

in that company. Dr Lawrence was asked about disclosure to the Parliament. He stated

that he was not aware of any report to the Parliament about the investment of public

funds in the CLCL project.

[81] Mr McBean, who also appeared for Licojam, CLCL and Mr Clarke, in the court

below, addressed the issue of misfeasance in public office in his opening statement to

Sykes J. Learned Queens Counsel submitted that there was no evidence, in WCCs

case, of any misfeasance. He did not, however, specifically address the issue of any

requirement for disclosure.

[82] Based on that analysis, it is difficult to agree with Lord Gifford that the non-

disclosure had been so raised and addressed as to justify the learned trial judges

assertion that the real issue is whether his omission to informis sufficient to come

within the tort of misfeasance in public office. It would be correct to say that the issue

of Mr Clarkes personally benefitting from public funds while he was a cabinet member

was raised. WCC sought to infer from that situation that Mr Clarke, who was the

minister in charge of the sector, in which his personal interest lay, had improperly

benefitted from his office. It cannot be said, however, that WCC had raised the issue of

disclosure or that Mr Clarke did not have authorisation from the Prime Minister or the

Cabinet for obtaining that benefit.

[83] Further, the learned trial judge seemed to have placed the onus of proving

authorisation on Mr Clarke. Sykes J made the following statement at paragraph [57] of

his judgment:

Mr Clarkes witness statement did not produce any evidence

on which this court could find that he did not know that his
private economic interest (CLCL) was provided money from
public funds. There is no evidence that Mr Clarke told
the Prime Minister or Cabinet that he was a
significant investor in CLCL. Indeed, he declared that
Licojam approached a number of government entities for
money. There is no evidence that he spoke to or did any leg
work in relation to the loan from NIBJ. Thus the real issue
is whether his omission to inform the Prime Minister
and Cabinet of his private economic interest in CLCL
with the consequence that he was part of the Cabinet that
voted public funds to be used for his private interest is
sufficient to come within the tort of misfeasance in public
office. (Emphasis supplied)

From that extract, it will be noted that the learned trial judge moved from the absence

of evidence from Mr Clarke concerning disclosure to the Cabinet, to a conclusion that

there had been no such disclosure. Sykes J did not intimate that he was of the view

that an evidential burden rested on Mr Clarke in the circumstances. Given the burden

placed on a claimant to prove the mental element of this tort, it is doubtful that there

was any such evidential burden placed on Mr Clarke.

[84] In light of the tenuous nature of the pleadings and the evidence in relation to the

issue of disclosure, the counter-notice of appeal should succeed. The issue was not so

definitively raised that Sykes J was entitled to find, at paragraph [71] of his judgment,

that it was unlawful for Mr Clarke to use his company, Licojam, to solicit and receive
public funds for his private economic gain without disclosure, at the very least, to the

Prime Minister or Cabinet., or that Mr Clarke could not have honestly believed that it

was lawful to seek to use public funds in this way.. The learned trial judge would

have been justified in making such findings if Mr Clarke had been available and was

cross-examined on those issues. The issues of disclosure and authorisation were,

however, not raised before he died and it would, therefore, not be fair to his case to

say that he did not address it in his witness statement.

[85] Without a finding of unlawful conduct, WCC would have failed to prove an

essential ingredient of the allegation of misfeasance in public office by Mr Clarke. Based

on that analysis, the counter-notice of appeal should succeed. Despite that finding, the

grounds of appeal will still be analysed.

Appeal grounds 1, 4, 5 and 6 The issue of misfeasance by Mr Clarke

[86] The learned trial judge found that Mr Clarkes action, of having Licojam solicit

and accept public funding for its venture, while he was a minister of government, was

unlawful. He, however, found that the action had no effect on WCCs business. A critical

aspect of WCCs complaint against the learned trial judges approach addresses the

issue of causation. At paragraph 48 of its skeleton submissions, WCC set out the core of

that complaint. It said:

The learned trial judge failed to appreciate that without the

Ministers misfeasance in public office, CLCL would not have
been formed, the coveted Jamalco contract would not have
been awarded to it and the multi-national company Rugby
would not have entered the lime market in Jamaica. The
learned trial judge failed to appreciate that [WCC] would be
 better able to tolerate and survive its start up issues if its
monopoly position had not been upset by the Respondents
when through the misfeasance in public office of the Minister
they established CLCL.

[87] Ignoring for the moment, the finding in respect of the counter-notice of appeal,

the only action by Mr Clarke that could be said to have been proved as being

improper was being involved, albeit indirectly, in the creation of CLCL with public funds.

Mr Clarkes visit to WCCs plant was only the basis for speculation by Mr Wong Ken that

Mr Clarke had, there, improperly obtained, and subsequently used to CLCLs advantage,

information gained on that visit. The concept was, as the learned trial judge described

WCCs case, a theory. There was no evidence to support it. The statement by Mr

Clarke about yielding ground to the competition was made after Mr Clarke had

already demitted office. It did not necessarily mean that while he was the minister in

charge of the industry, he carried out any act which would constitute misfeasance.

[88] The difficulty with WCCs complaint, quoted above, is threefold. Firstly, the

events which it identified as flowing from the creation of CLCL (the impugned act of Mr

Clarke), were not reasonably foreseeable. Even at the time of the creation of CLCL it

could not be said that Mr Clarke would have known of the existence of any entity that

would have been negatively affected by CLCL. It is true that CLCL was founded in order

to supply quicklime to the alumina trade, and that it had a natural synergy with

Jamalco, but Jamalco was only one of three alumina producing companies with a

demand for quicklime. Any competing supplier would have had a market in one or other

or both of the other alumina companies. There were one or more other intervening
factors, including the size of the product, which prevented WCC from securing a

contract with Alcan or Alpart. Those factors were not of CLCLs making.

[89] The second difficulty with WCCs criticism is that it ignores all those other factors

which intervened to create the situation which eventually caused WCCs demise. A

principal factor was that its product was not widely acceptable to the consumers of

quicklime. The problem was due to imprecise information that WCC had received prior

to constructing its plant. That information suggested that all the alumina companies

used the same specification for quicklime in their process. WCC configured its plant

based on that information. The result was that only Jamalco could easily use WCCs

product. One of the reasons that WCC applied for a second tranche of financing from

NIBJ was to attempt to cure that malady. Even then, the machinery acquired and

installed as the cure, proved to be ineffective, as it was not properly designed and

needed even more equipment in order to be used. Similar problems attended the fact

that consumers of quicklime, other than the alumina companies, wanted the product in

bags. WCC did not originally have a bagging plant and the attempts to put one in place

were also ineffective.

[90] The third difficulty with WCCs criticism of the learned trial judges approach is

that WCC presumed that it was entitled to an unending, or at least lengthy, monopoly

in supplying the quicklime market. That presumption was neither sound nor reasonable.

It ignored the fact that WCC could not, based on its production levels, supply the

demands of the market for quicklime and therefore the opportunity for one or more
competitors was always on the cards. The alumina companies had been importing

quicklime even before WCC commenced operation. Competition from imported

quicklime was also an inherent feature of that market. Indeed, WCC acknowledged,

from as early as December 1996, that there was competition in the market by way of

imports. In a letter to NIBJ of 6 December 1996, WCC stated that both Jamalco and

Alcan were then importing lime into Jamaica (volume 4, page 40 of the record of

appeal). WCC was of the view that it would have been able to comfortably compete

with those imports. It proved, however, that a later entrant to the market, Chemical

Lime Corporation, was prepared to supply the alumina companies with imported

quicklime at a cost significantly less than that at which WCC could profitably produce

the commodity. WCC could not prevent, or deny the possibility of, the entry to the

market of an entity which could provide quicklime at a lower cost or on more attractive

terms than it could.

[91] For those reasons, the learned trial judges reasoning on this point cannot be

faulted, and these grounds cannot succeed.

Appeal grounds 2 and 3 The size of the quicklime market

[92] The issue of the size of the quicklime market was a major issue joined between

the parties at the trial. WCCs position was that the market was small and, in any event,

its only realistic market for its product was Jamalco. WCC contended that CLCL had

improperly shut it out of the Jamalco market. The methods used, it said, were the
securing of an exclusive contract with Jamalco to off-take RJLMLs quicklime and using

product-pricing with which WCC could not compete.

[93] The stance by the respondents was that the market for quicklime was larger

than both companies together could supply and was constantly increasing. The

respondents provided evidence supporting their stance. The issue was a question of

fact for the learned trial judge and he accepted, as reliable, the evidence provided by

the respondents, particularly the evidence of Dr Lawrence and Mr Norman Davis, a

former employee of Alcan and managing director of RJLML.

[94] The learned trial judge explained his reasons for accepting the testimony of

those two witnesses. He was justified in doing so. There was an enormous amount of

evidence that spoke to a commitment by all the relevant government agencies,

including NIBJ, JVF and CAP to an expansion of the local production of limestone and

quicklime. Mr Wong Kens testimony suggesting a small market for quicklime was not

always consistent and even he, on at least one occasion in cross-examination, accepted

that the market could accommodate more than one supplier.

[95] There is also evidence, from a letter written by WCC, dated 18 October 2000,

that even with competition from RJLML, there was still a shortfall in meeting the

demand for quicklime. WCC said, in part:

A critical analysis of the existing market reveals that Alcan

experiences a daily shortfall of 70m/t/d/ and Jamalco
experiences a shortfall of 50m/t/d. Further to these daily
shortfalls are the [in]evitable kiln failures which place huge
 demands on the islands [sic] stretched lime producing
facilities. (volume 4 page 454 of the record of appeal)

[96] The learned trial judge noted that in a submission to the NIBJ board, there was a

suggestion by its technical team that the market could not accommodate both WCC and

the, then proposed, CLCL/Rugby entry into the market. At paragraphs [184] [185] of

his judgment, he rejected that opinion and explained his reason for so doing. This court

should not disturb the finding of the learned trial judge on this issue of fact. The stance

that has been taken by this court has consistently been that it will not interfere with

findings of fact by judges at first instance, if they are not unreasonable and are

supported by evidence. That stance was endorsed by the Privy Council in Industrial

Chemical Co (Ja) Ltd v Ellis (1986) 23 JLR 35 at pages 39F-40G. Their Lordships

more recently re-emphasised that position in Beacon Insurance Co Ltd v Maharaj

Bookstore Ltd [2004] UKPC 21.

[97] The result of the learned trial judges finding of fact on that important issue was

pivotal for his findings on the major questions of misfeasance and causation. He found

that none of the public officials in this case were guilty of misfeasance in public office

and that it was not the creation of CLCL that caused WCCs demise. He said at

paragraph [74] of his judgment:

It seems to this court that it cannot be said on a balance of

probability [sic] that the second aspect of the double mental
element of the second form of the tort has been satisfied
because the evidence on the size of the market which I have
accepted is that the quicklime market was always
undersupplied and was expected to expand. In other words,
 once there is a market sufficient in size to accommodate two
or more producers it becomes increasingly difficult to
succeed in the tort because it would be hard to show that
the public official, while promoting his private interest, knew
that the claimant would be harmed or was reckless as to
whether he would be harmed. In this type of situation it is
not a zero sum game where one producer must eliminate
the other to survive and so must necessarily bring about the
demise of the claimant. It seemed to this court that Mr
Clarke did not even address his mind to eliminating WCC but
rather devoted his energies to promoting his company. All
the reliable evidence from knowledgeable persons pointed to
an ever expanding market. In this regard, Mr Norman Davis,
a witness for the second, third and fifth defendants, spoke
of the demand for quicklime for Windalco [Alcan]. His
evidence is most telling. Not only did he say that the
demand for quicklime was increasing but gave a sound
scientific basis: Jamaicas bauxite now had increasing levels
of phosphorous which needed to be extracted by
quicklime.Thus increase in demand for quicklime was
spurred by two things: the increased phosphorous content of
the bauxite ore and the increased production of bauxite. All
this took place in the context of the three bauxite plants
having old quicklime plants which needed to be replaced.

[98] Although WCC relied heavily, at the trial, on a dependence on off-take of its

product by Jamalco, its approach prior to, and at the time of its commencing operation,

was that there was a wider market available to it. It based its applications to NIBJ, for

financing, on its intention and ability to supply all the alumina companies, the local

sugar industry and even an overseas market, in the Caribbean and beyond. That

approach continued even after its discovery that supplying Jamalco was then a limited

option. The learned trial judge was entitled to find that the loss of the Jamalco market

was not what caused WCC to fail. There was ample evidence of major miscalculations,

misapplications and misadventure, hampering WCC over the years of its operation, to
enable the learned trial judge to have found that its demise was not due to the actions

of the respondents.

Ground 7 The evidence of Messrs Wong Ken and Williams

[99] This ground straddled the areas of both the size of the market and the issue of

misfeasance in public office by Mr Clarke, Dr Lawrence and NIBJ.

[100] WCCs complaint for this ground is that the learned trial judge did not give

sufficient attention to the evidence of Mr Wong Ken or to the documents written by Mr

Elworth Williams. It, however, cannot be denied that Mr Wong Kens evidence was fully

outlined in what the learned trial judge described as WCCs theory. WCCs case, as it

was understood and set out by the learned trial judge, was contrasted with the

evidence of Mr Davis and Dr Lawrence and the learned trial judge explained why it was

that he accepted their evidence, both as to the size of the market and as to Dr

Lawrences influence, or lack thereof, in the conclusion of a contract between RJLML

and Jamalco. As was mentioned above, this was a finding of fact which should not be

disturbed.

[101] The bulk of Mr Williams correspondence, which was admitted into evidence, was

written in the context of a quarrel between certain other members of the board of CLCL

and himself. The quarrel emanated from a dispute as to whether his company, Tricon

Investments Corp Ltd (Tricon), ought to have been paid for services, which he said that

it had rendered to CLCL. His chairmanship of CLCLs board was a casualty of that

dispute. He was replaced as chairman. Mr Williams was a principal of Tricon as well as

of CDA, one of the shareholders of CLCL. There was also a stand-off between the other

members of the CLCL board and himself about having Tricon registered as the owner of

the shares, for which CDA was the registered owner.

[102] In his letters to various persons, Mr Williams levelled accusations of wrongdoing

which, he said, negatively affected CLCLs progress. These accusations were made

mainly against Dr Lawrence. Mr Williams did, however, speculate that possibly Mr

Clarke had improperly sought to benefit CLCL while he was the Minister of Mining. He

made no specific accusation against Mr Clarke, nor did he refer to any specific factual

situation in his speculations.

[103] Mr Williams, in his letter of 23 March 1998, addressed to Dr Lawrence, referred

to WCC. He said at page 3 of his letter (page 170 of volume 2 of the record of appeal):

The operations of [CLCL] are rife with conflicts of interest

which, if remain unresolved, will jeopardize implementation
of the project. You are a member of the NIBJ and have
undoubtedly been party to decisions relating to [WCC], our
competitor, simultaneously, you attend Board
meetings of [CLCL] and seek to determine policies
which could adversely impact on [WCC]. We also
understand that [WCC] is currently negotiating a short-term
supply contract with Jamalco and you will undoubtedly
participate in that Boards decision on the matter. How can
you simultaneously serve impartially all these conflicting
interests? (Italics as in original, Emphasis supplied)

In that extract, Mr Williams seems to suggest that Dr Lawrence may have been

improperly using his position and influence to adversely impact WCC.

[104] In his focus on raining opprobrium on Dr Lawrence, Mr Williams seems oblivious

to the fact that he contradicted himself when he later suggested that Dr Lawrence did

not have any real influence on the Jamalco board. In an attempt to demonstrate that Dr

Lawrence had not been of any beneficial assistance to CLCL, Mr Williams said at

paragraph (d) of page 4 of the said letter (page 171 of volume 2 of the record of

appeal):

You have been claiming that you have made a substantial

contribution to the [CLCL] project. I happen to know that
your claims are false. But if indeed you have the influence
you claim, why was it necessary for the project to be
shelved because the JVF was unable to obtain a lime supply
contract with Jamalco? How was Jamalco able to enter into
an agreement with Chemical Lime such that if the latter had
performed, the [CLCL] project would be dead? Why is it that
you are presently the greatest obstacle to [CLCLs]
performance of an existing US$1 million limestone supply
contract with Jamalco, on whose Board of Directors you sit?
(Italics as in original)

Mr Williams concluded that paragraph of his letter with the following:

While we are not suggesting that you should improperly use

your influence with Jamalco on [CLCL]s behalf, where is the
manifestation of your assistance? Dont you perceive any
conflict of interest here? (Italics as in original)

[105] His claim of not seeking any improper grant of favours appeared in the

paragraph following his suggestion to Dr Lawrence that he should seek to use his

influence to benefit CLCL. Mr Williams said, in part at paragraph (c) (page 171 of

volume 2 of the record of appeal):

You have already done much damage to the project and, in

order to mitigate the damages, my advice to you is to use
your influence to have the facilitating institutions
 immediately subscribe the additional equity for which they
are already committed. Perhaps this might just give [CLCL]
the necessary leverage to recover its initiative in this
project.

[106] Mr Williams did not provide a witness statement. By the time of the trial, he was

very ill. There was a proposal to have him testify at his home, but his medical condition

prevented any progress in that regard. In the end, the only material from Mr Williams,

which was before the learned trial judge, was Mr Williams letters and memoranda to

members of CLCLs board. The learned trial judge had admitted them into evidence.

None of those were made under oath or subject to any testing for accuracy or

reliability. They not only included speculation by Mr Williams, but they included Mr

Williams interpretation of certain situations. In light of those deficiencies and the tenor

of some of Mr Williams communications, it is not surprising that the learned trial judge

ignored those bits of evidence.

[107] This was not a case like Flannery v Halifax Estate Agencies Ltd [2000] 1

WLR 377, where the learned trial judge had contending expert evidence that required

him to explain a preference for one body of evidence over its competitor. Mr Williams

documentation did not constitute expert evidence. There is no doubt in this case why

the learned trial judge found that WCC lost its claim. He carefully explained his reasons

for his finding on each issue that was identified as relevant. His decision was

transparent.
[108] It is noteworthy, however, that except for the single reference to WCC

mentioned above, Mr Williams showed no interest in WCC. He did not demonstrate any

concern with undermining or thwarting WCCs progress. He made no allegation that any

other director of the company had done so. His main concerns were his company,

Tricon, and the health and welfare of CLCL, by which he undoubtedly hoped that

Tricons investment in CLCL would prove profitable.

[109] Based on that assessment, this ground of appeal cannot succeed.

Grounds 9, 10 and 11 The issue of improper conduct by Dr Lawrence

[110] The learned trial judge, at paragraph [80] of his judgment, succinctly

summarised WCCs case against Dr Lawrence. He identified the various accusations that

WCC had made against Dr Lawrence and stated that the conduct, of which Dr Lawrence

was accused, was said to amount to misfeasance in public office and conspiracy to

advance the interests of Mr Clarke at the expense of WCC (paragraph [80] of the

judgment).

[111] Sykes J, in paragraphs [81] through [86] of the judgment, assessed each of the

accusations and found that neither misfeasance nor conspiracy had been proved. In

respect to the charge of misfeasance, the learned trial judge found that the mental

element of the tort had not been proved. He found that:

Dr Lawrence never addressed his mind to the permission

[to Mr Clarke by the Cabinet] issue Dr Lawrence was not a
member of the Cabinet.This tort requires a mental element
which is either knowledge that neither he nor Mr Clarke had
the power to do what they did or was reckless as to whether
 he or Mr Clarke had the power. If he never thought about it,
how can it be said that he had either states of mind?
(paragraph [81])

[112] The learned trial judge, in considering WCCs several accusations, made two very

important findings of fact. He held that Dr Lawrence:

1. always honestly believed that there was enough room

in the market for two producers[and] that even with the
combined production of CLCL, WCC and the
bauxite/alumina companies, there would still be a
shortfall (paragraph [82]).

2. did not exercise any influence over Jamalcos

commercial decisions. Therefore he did not exercise any
influence over Jamalcos decision to purchase or not to
purchase quicklime from WCC (paragraph [86]).

[113] It was later in his judgment that the learned trial judge concluded his analysis

in respect of the conspiracy charge. He held that failure in respect of the misfeasance

charge necessarily meant failure on the conspiracy charge, as there was no proof of an

unlawful act. He said at paragraph [215]:

The evidence relied on to ground the conspiracy is the same

as that used in the tort of misfeasance in public office and
breach of fiduciary duty. From what has been said above
this court has concluded that neither Dr Lawrence nor NIBJ
was part of any conspiracy to injure WCC. In addition, there
is no causal connection between the defendants conduct
and WCCs loss.

[114] WCCs complaints in respect of the learned trial judges approach to this area of

the case is that he failed to give sufficient weight to the fact that Dr Lawrence wielded

great influence in the bauxite/alumina industry, by virtue of his many memberships of

various boards in that industry. It argues that the learned trial judges findings that

there was no proof that Dr Lawrence influenced the Jamalco/RJLML contract ignored

realities in Jamaica. Lord Gifford, on WCCs behalf, argued that there was evidence that

Dr Lawrence was to have sought to influence the issue of the limestone contract

between Jamalco and CLCL and therefore it is not inconceivable that he could have

influenced the Jamalco/RJLML contract in respect of quicklime. WCC further argued that

the learned trial judge, in concluding that Dr Lawrence did not intend to harm WCC,

was addressing the wrong question, in that WCC was not alleging targeted malice but

rather the knowledge or recklessness that assisting CLCL would result in harm to WCC

or to a class to which WCC belonged.

[115] Mr Hylton QC, appearing for Dr Lawrence, contended that WCCs case against Dr

Lawrence was based on broad generalisations that relationships of the kind, in which Dr

Lawrence was engaged, resulted in favouritism being practised in Jamaica in matters of

business. Learned Queens Counsel argued that the effect of WCCs position, on the

situation in Jamaica, was that it asked that wrongdoing be presumed even without

evidence. He submitted that a close examination of the evidence demonstrated that not

only did Dr Lawrence not have as great an involvement in the business of CLCL or in

respect of WCC, as WCC asserts, but that the evidence shows that Dr Lawrence insisted

on a level playing field for all players in the quicklime market. Mr Hylton submitted that

there was no evidence of any abuse, by Dr Lawrence, of his office, or indeed, of any

conspiratorial conduct by him, in relation to damaging WCC.

[116] WCCs arguments lean heavily on inferences which, it says, may be drawn from

the various elements of Dr Lawrences participation in the bauxite/alumina industry. The

learned trial judge was entitled, however, having seen and heard the witnesses,

particularly Dr Lawrence himself, to find that the size of the market was such a factor

that Dr Lawrences:

a. presence on the board of NIBJ when it participated with

Licojam and others in the creation of CLCL;

b. contributions to the board of CLCL; and

c. contributions to the board of NIBJ in its dealings with

WCC,

did not prove WCCs theory of misfeasance and corruption. The learned trial judge was

entitled to find that Dr Lawrence was seeking to enhance the quicklime industry and

assist both manufacturers of the product. There was evidence that Dr Lawrence

informed CLCLs board that the policy regarding incentives was that each manufacturer

would be given the same level of support, no more, no less (volume 7 Tab J page 81

of the record of appeal).

[117] There was similarly, no evidence of a conspiracy between Dr Lawrence and any

person or entity to inflict harm on WCC.

[118] These grounds should also fail.

Grounds 12 - 17 The issue of NIBJ and a fiduciary duty to WCC

[119] The learned trial judges findings concerning the accusations of fiduciary breach

against NIBJ have been set out above. WCCs criticisms of those findings are

multifaceted. Firstly, it asserts that the learned trial judge failed to appreciate that the

general principles concerning commercial banks and their customers did not apply to

investment banks, particularly those that are charged with using public funds to

facilitate and encourage production and industry in the island. Next, it contends that the

learned trial judge failed to give any, or any sufficient, weight to the fact that the

submissions to NIBJs board were the result of a joint effort of WCC and NIBJs staff.

That situation, WCC contends, was such that it was entitled to believe that the

assertions in those submissions, especially regarding its market and price strategy were,

not only accurate, but were supported by both the staff and board of NIBJ.

[120] WCCs third area of complaint is that the learned trial judge ought to have found

that NIBJ owed a fiduciary duty to WCC as soon as NIBJ became entitled to appoint

directors to WCCs board as a condition of the grant of the first loan. Finally, WCC

contends that the learned trial judge was in error when he found that NIBJs breach of

fiduciary duty, as he found did occur, did not cause WCC any loss.

[121] These broad areas shall be considered separately.

a. NIBJs status as an investment bank

[122] Lord Gifford submitted that the learned trial judge was wrong in applying the

learning concerning the relationship between commercial banks and their customers to
the situation existing between NIBJ and WCC. He argued that the principle in National

Commercial Bank (Jamaica) Limited v Hew (2003) 63 WIR 183 (hereafter referred

to as NCB v Hew), that bankers did not automatically owe a duty to advise their

customers, did not apply in the present circumstances. He submitted that investment

banks operated differently from commercial banks and therefore different principles

applied.

[123] Learned Queens Counsel also submitted that the learned trial judge failed to

recognise and pay due regard to the importance of NIBJs position as an investor with

knowledge that the success of the venture depends on the existence of a state of

affairs, which NIBJs very participation in the rival venture [CLCL] will prevent from

occurring (paragraph 59 page 25 of his skeleton arguments). He cited, amongst

others, Commonwealth Bank of Australia v Smith [1991] FCA 375; (1991) 102

ALR 453, in support of his submissions.

[124] Mr Piper QC, appearing for NIBJ, submitted that NIBJ had a statutory

responsibility to develop industries. He argued that mining was one of the industries

that were critical to the Jamaican economy. Learned Queens Counsel submitted that in

carrying out its statutory mandate, NIBJ would be statutorily required to support more

than one entity in an industry, such as mining, even if it resulted in a conflict of

interest.

[125] Less startlingly, Mr Piper submitted that NIBJ, as an investment banker, had no

duty to tell an entity that it was pursuing an incorrect course. He relied on NCB v Hew
for support in respect of these submissions. He adopted the learned trial judges

approach, and submitted that it was when NIBJ had appointed its representative to

WCCs board of directors that NIBJ then owed a duty to advise WCC.

[126] The essence of the decision in NCB v Hew, concerning this point, is that unless

there was some other relationship, such as financial adviser, established between a

banker and a customer, the banker had no duty to inform a customer seeking financing,

that the proposed project was commercially disadvantageous to the customer. Their

Lordships, at page 188d, adopted the opinion expressed by Warne and Elliot in their

work, Banking Litigation (1999), at page 28:

A banker cannot be liable for failing to advise a customer if

he owes the customer no duty to do so. Generally speaking,
banks do not owe their customers a duty to advise them on
the wisdom of commercial projects for the purpose of which
the bank is asked to lend them money. If the bank is to be
placed under such a duty, there must be a request from the
customer, accepted by the bank, under which the advice is
to be given.

[127] There is nothing in the authorities cited by Lord Gifford which supports his

contention that investment bankers, simply by virtue of their enterprise, owe a duty to

advise potential borrowers of the likelihood of success of the proposed project for which

financing is sought. In Commonwealth Bank of Australia v Smith, the bank was a

commercial bank, but the transaction, the subject of the dispute between the parties,

was an investment transaction. The court found that the banks manager had become,

over a number of years, the investment adviser of the customer. It was by virtue of

that position that the bank owed a fiduciary duty to the customer. It breached that duty
when it placed itself in a position of conflict with the customers interests, and the

manager engaged in conduct that was misleading to the customer.

[128] In one of the academic papers cited by Lord Gifford, Investment Banks as

Fiduciaries: Implications for Conflicts of Interest, Melbourne University Law Review

August 2005, page 478, the learned writer, Andrew Tuch, makes it clear that although a

core function of investment banks is the provision of financial advisory services, in the

absence of a fiduciary relationship and outside any express contractual undertaking,

investment banks will, generally speaking, not be obliged to avoid conflicts of interest in

providing these financial advisory services (page 479). It is true, that in many

circumstances the investigation and implementation of the transaction will result in the

investment bank providing advice to the customer and the customer, to the knowledge

of the investment bank, placing trust and confidence in that advice. In such

circumstances a fiduciary duty is placed on the investment bank. Each case is, however,

dependent on its own facts.

[129] Mr Pipers submission that NIBJs statutory obligations supersede any fiduciary

duties it may owe to its customers is also untenable. NIBJ is registered under the

auspices of the Companies Act. Its memorandum of association is exhibited at volume 3

page 289 of the record of appeal. At paragraph EE of that document, it is noted that its

objects shall be carried out on commercial lines and in the best interests of the

shareholders and Jamaica as a whole. It had no special statutory exemption from

operating in conformity with any law. It was therefore obliged to conform to the

requirements of equity.

[130] NIBJs mandate would, however, as would any other investment bank, allow it to

invest in competing enterprises in an industry, provided that it could avoid being placed

in a position where it owed a fiduciary duty to any of those entities. Full disclosure of

the competing interests would, undoubtedly, be an essential element of such ventures.

[131] On that analysis, there was no obligation on NIBJ to give advice and no position

of trust which was undertaken, simply by virtue of NIBJ being an investment bank. It is

inconceivable, therefore, that the mere entitlement to make an appointment to the

board of directors, without having acted on that entitlement, would create a duty in

NIBJ to WCC, or to alter NIBJs status.

b. The submissions to NIBJs board

[132] WCCs applications for funding were, on each occasion, assessed by a technical

team comprised of NIBJs employees. In conducting its analysis, the technical team

received information from WCC in relation to the company and the financing that it

required. The team made a visit to WCCs factory plant as part of its assessment of

WCCs first application for financing. The team then prepared an analysis of the

respective applications. Each analysis was in the form of a report or submission to

NIBJs board. In its submission to NIBJs board in respect of WCCs first application, the

team concluded that the project is viable and fits well within NIBJs Investment [sic]
guidelines (volume 4, page 30 of the record of appeal). It recommended that NIBJ

invest in WCC.

[133] WCCs submission is that this conclusion and recommendation became advice to

WCC that its pricing and overall project was viable. The contention cannot be accepted.

Firstly, there is no indication that the submission was shared with WCC, but even if that

submission was shared with WCC, there was no relationship at the time of that first

submission, which placed NIBJ in the role of an investment adviser. There is no reason

to rule that the second submission required any different consideration. The second

reason for rejecting WCCs contention is that those analyses were for NIBJs purposes

and aimed at addressing NIBJs interests. A recommendation of an application for

financing cannot automatically become advice to the applicant that its pricing and

project are viable. Nor should a recommendation for the grant of financing create an

expectation in WCC that a relationship of trust and confidence existed (ground of

appeal 17(e)) between NIBJ and itself.

[134] The issue of the WCCs proposed price, at the time of its first application for

financing, must next be considered. WCC argued in this appeal (ground 17(f)), that not

only did NIBJ fail to disclose that it had invested in an entity which intended to compete

in the same market, but it failed to disclose that the proposed price to be charged by

the competitor was significantly less than that being charged by WCC.

[135] The fact situation is that, just before WCCs first application to NIBJ for financing,

its potential rival, CLCL, was in a very unhappy state. CLCLs limestone production was
beginning to encounter quality difficulties, and its expenses required further financing

from its shareholders, which need was not being swiftly met. It still hoped to produce

quicklime but did not have the financing to acquire the equipment. It was in this

context that it was considering its options. At a meeting of the board of directors, held

on 28 August 1996, the discussions spoke, in part, to the then status of the market:

The Chairman, Dr. Lyon reported on the discussions and

negotiations he had been having with the Rugby Cement
Group who had been in the island during which time they
visited all the alumina plants as well as Western Cement.
Based on their findings their Chief Executive Officer travelled
to the island. Rugby is to submit a proposal to their Board of
Directors in early September.

Rugby is seeking for an indicative price from the alumina

companies. They have received assurance from Alcan that
their Ewarton refinery will be willing to purchase their lime
requirements from Clarendon Lime Company Ltd. Alpart is
capable of producing their own needs, therefore, would not
be outsourcing. Rugby estimates that Jamalcos cost price
for lime is about US$86.00/per ton and have therefore
offered them US$85.00 per ton. Jamalco is, however, using
the possible entry of Chemical Lime into the market place to
negotiate prices downward. Rugby has to make a
determination if the investment in Jamaica is feasible before
making a commitment.

Western Cement is planning to sell lime at US$120.00 per

ton. Their plant, however, might not be efficient. The
general consensus is that Chemical Lime is entering the
market by cutting prices after which they can raise their
prices.

It must be borne in mind that this market intelligence was being analysed before WCC

had commenced production of quicklime and before it had made an application to NIBJ.

WCCs claimed ignorance of this intelligence at that time speaks to its failure to prepare

for the market that it was proposing to enter. The extract suggests that Rugby had had
contact with WCC during its reconnaissance of the Jamaican market. How could Rugby

have disclosed information to CLCL, yet WCC was not able to secure that information?

[136] The excerpt from the minutes also shows that WCCs complaint of wrong-doing

by NIBJ, at that time, is misguided. There was no intention by CLCL to offer quicklime

to the market, at any price, at the time of WCCs first application to NIBJ. It would

therefore be incorrect to say that NIBJ knew, at the time of that application, that CLCL

intended to offer [quicklime at] a better price [than WCC could] (ground 17(f)).

c NIBJs representation on WCCs board

[137] The effect of the appointment of NIBJs representative on the board of WCC

must now be considered. NIBJ appointed Ms Diane Wynter to WCCs board as of 27

November 1997. She was already a member of the board of directors of CLCL as NIBJs

representative. The learned trial judge opined that the appointment to WCCs board

created a duty on NIBJ to give WCC its best advice. The appointment, he found, also

placed NIBJ in an irreconcilable conflict between the duty of loyalty owed to CLCL and

the same duty to WCC (paragraph 180). He found that NIBJ failed in its duty to WCC.

He said at paragraph [188]:

This court is prepared to accept that when Mrs Dianne

Wynter was appointed to WCCs board as NIBJs
representative, NIBJ was under a fiduciary duty to give
its best advice to WCC because it had become a
director. As noted earlier, a director has a duty of loyalty to
his company and that means, among other things, giving it
the best advice that he has to offer. The court accepts that
when NIBJ appointed Mrs Wynter to WCCs board NIBJ
came within the accepted categories of a fiduciary. A
director has an obligation, unless modified by contract or
other means, to advance the best interest of the company.
 NIBJ therefore had a duty to give WCC its best advice.
There is nothing to indicate that NIBJ, without revealing the
proposed pricing structure of CLCL, indicated to WCC that it
may wish to revise its strategy since it appeared to be
unworkable. NIBJ through Mrs Wynter, qua director,
should have made it clear to WCC that its pricing
strategy was questionable. The failure to do this, in the
opinion of this court, amounts to a breach of fiduciary
duty. (Emphasis supplied)

[138] The learned trial judge supported his position with references to Bristol and

West Building Society v Mothew (t/a Stapley & Co) [1996] 4 All ER 698, 711-

712. That case did not involve a company director but spoke to the need for loyalty in a

fiduciary. Lord Porter made it clear in Regal (Hastings) Ltd v Gulliver [1967] 2 AC

134, that directors occupy a fiduciary position toward the company whose board they

form (page 159). That fiduciary position requires a duty of loyalty to the company and

acting in the companys interest.

[139] The learned trial judges reasoning that NIBJ, through its representative on

WCCs board, failed to act in WCCs interest, cannot be faulted. Not only did NIBJ

breach its fiduciary position when it placed itself in a position of conflict; being on the

respective boards of directors for the competing entities, WCC and CLCL, but it failed to

disclose to WCC that it was represented on the board of WCCs competitor. In that

position of conflict, NIBJ was required to serve two masters with equal dedication,

which has been long pointed out to be an impossible task. The issue of whether that

failure resulted in loss to WCC will be analysed below.

[140] Based on that analysis, however, grounds 12-17 should fail.

Ground 18 The issue of causation

[141] The issue of causation arises in the case of NIBJs breach of its fiduciary position.

The learned trial judge, however, dealt with the issue of causation on a wider basis. He

did so partly because he found that Mr Clarke had been guilty of misusing his office for

his personal gain.

[142] In dealing with the issue of causation, Sykes J stated the incontrovertible

principle that there must be a causal connection between the action of the tortfeasor

and the damage suffered by the [claimant] (paragraph [78] of the judgment). He

stated that, even in claims in equity, there must still be a causal connection between

the alleged breach of duty and loss allegedly suffered by the claimant (paragraph

[191] of the judgment). The learned trial judge examined the facts relating to the

causation issue...in the section dealing with breach of fiduciary duty (paragraph [79] of

the judgment).

[143] As a prelude to his analysis, the learned trial judge set out his finding that WCC

had, by the time NIBJ had appointed a director to its board, already committed itself to

a flawed business plan. The learned trial judge used a cricketing analogy for his

description of WCCs position. He said at paragraph [189]:

By the time of Mrs Wynters appointment in 1997, WCC had

already committed itself to playing down the wrong line.

He went on to say:

WCC in fact commenced production on a false premise. Had

WCC properly informed itself of the accurate information
 needed during the planning and construction phase of the
plant it would undoubtedly have found that the different
bauxite companies had different quicklime size
requirements. WCC was heading towards the iceberg and
nothing could be done to save it save massive injections of
capital which NIBJ, even as a director/lender was not under
any legal obligation to provide.

[144] He commenced his analysis of the issue of causation at paragraph [191] of his

judgment. After explaining the juridical basis of his approach, the learned trial judge

repeated his earlier assertion that WCC was already committed to a flawed business

platform. He said, in part, at paragraph [193]:

NIBJ had no duty to advise WCC on its course of action before it

became a director of WCC. When it became a director, WCCs
problems were very severe and total disclosure of what NIBJ knew
about pricing and cost of production after Mrs Wynters
appointment would not have changed WCCs position. WCC was
committed to a flawed production strategy which it did not know
until after it started actual production. By the last quarter of 1997,
WCC needed money to recalibrate the plant. It had not rid itself of
the high cost debt it acquired to start the construction of the plant.
When WCC got the first loan from NIBJ it was supposed to have
begun production in January 1997. Production did not start until
May 1997 and even then production stopped from May 2 to August
1997. In effect, from January 1997 to August 1977 [sic], WCC had
only one day of actual production. The high cost debt was still
there. Even when production resumed in August 1997, WCC had
not known at that point that its plant was wrongly calibrated for all
three bauxite companies. WCC did not have a bagging plant to sell
quicklime in bags to purchasers who might require quicklime be
given to them in bags....

[145] The learned trial judge concluded that WCCs losses were caused by the

cumulative effect of (a) the incorrect calibration of the plant; (b) the high debt servicing

costs; (c) the cancellation of the quicklime contract by Jamalco and (d) the various
mishaps at the factory. The losses were not caused by any breach of fiduciary duty

(paragraph [193]).

[146] WCC, in this appeal, took those conclusions to task. It argued that the learned

trial judges assertions were seriously flawed and not warranted on the facts

(paragraph 92 of the appellants speaking notes). As to finding (a),

WCC asserted that the flawed calibration of the plant only became a material issue

after WCC had been unable to obtain a long term contract with Jamalco (paragraph 93

of Lord Giffords speaking notes). On this issue, there was ample evidence to support

the learned trial judges finding. In its 1996 application to NIBJ, WCC clearly indicated

that it had all the alumina companies in its sights as potential customers. It particularly

singled out two as having already indicated an interest in its product. At paragraph 6.0

of the submission to the board of NIBJ (volume 4 page 26 of the record of appeal), the

following appears as representing WCCs hopes:

[WCC] has identified two (2) major customers, JAMALCO

and Alcan, who have indicated that they would be willing to
purchase a minimum of 60,000 MT and 12,000 MT per
annum respectively. The bauxite/alumina companies
currently meet their lime requirements by local suppliers and
importing the shortfall. The companies have expressed their
dissatisfaction with the quality of the lime from local sources.
At the same time, Alpart has expressed a willingness to
purchase 240,000 ton [sic] per year of aggregate for feed
stock for its own lime production. This level of production
would more than meet [WCCs] own projections for outside
sale of aggregate.

[147] The evidence is that it was only when it had started production of quicklime that

WCC realised that its product was not readily acceptable to Alcan. The reason being
advanced in this appeal for the need for recalibration of WCCs plant was not that which

was advanced at the relevant time. In its letter of 24 November 1997, applying for

additional financing, WCC blamed its position on the faulty information it had received

concerning the quicklime needs of the alumina companies. In this regard, the letter

stated, in part:

[WCC] finds itself in a rather disturbing situation arising from

our reliance on information provided to us in 1992 by the
alumina industrys Lime task force headed by Alcan. At that
time we were provided with the specifications for the
product required by the alumina industry and we dutifully
constructed our plant around same. As it has turned out, the
size specification of the product is not common to all the
alumina plants, specifically Alcan is unable to use the
product at its Kirkvine works and worst [sic] none of the
companies had the ability to receive the product without
some modification to their receiving facilities. (Volume 4,
page 225 of the record of appeal)

[148] The letter went on to explain that Jamalco had adjusted its receiving facility but

that WCC wished to broaden its market opportunities. It pointed to the specific needs of

Alcan and the sugar industry:

Alcan has told us that their Kirkvine works require lump lime
rather than our milled lime, and we must now acquire,
engineer, and install equipment that meets their
specifications. Further, the sugar industry who [sic] has
always expressed great interest in our product for the most
part receives it in a bagged form and to that end we now
wish to install a bagging plant.

[149] It is true that, up to about the end of October 1997, Jamalco was taking almost

all of WCCs production of quicklime. At or about the beginning of November 1997

Jamalco suspended their order for quicklime. The reason given is that they are
currently mining a deposit that is very pure and as a result, their lime requirements

have been reduced. The time frame for this suspension has not been specified and it

could be two weeks as well as be two months (NIBJs update report on WCCs status

(volume 4 page 219 of the record of appeal)). The update report noted that WCC was

obliged to cease production in light of Jamalcos position.

[150] For completeness it should be stated that it was in December 1997, that Jamalco

issued a letter committing to purchase quicklime exclusively from Rugby/CLCL for a

period of 15 years. Rugby/CLCL was, however, not in a position to manufacture

quicklime at that time and Jamalco resumed purchasing the product from WCC.

[151] The calibration difficulties continued to dog WCC. Although it secured the

equipment that was intended to meet Alcans and the sugar industrys requirements,

the equipment (financed largely by NIBJ funding) was not properly designed for the

purpose and, for the most part, remained unused.

[152] The conclusion to be drawn from that evidence, as the learned trial judge found,

was that it was WCCs lack of flexibility, based on its flawed market intelligence and

incorrect installation of equipment, which was a major contributor to its inability to

earn. This was in the context of its having to grapple with the crippling interest rates

from its short-term debt.

[153] On the issue of the high debt servicing costs, WCC complained that the learned

trial judge should have found that it was because WCC had unlawful competition from
Rugby/CLCL that its debt costs were a significant factor. The fact is, however, that WCC

was sagging under its debt costs from as early as 1996. It was its inability to pay its

debts that led it to apply to NIBJ, for financing, in the first place. It is to be noted that a

condition of the grant of the first tranche of financing by NIBJ was that it was to be

used exclusively for payment to third parties, mainly suppliers who had, prior to the

application, remained unpaid. By August 1997, just prior to commencing the regular

production of quicklime, WCCs debt had ballooned. It continued to be affected by

various issues that reduced or suspended its operations, but the interest on the debt

was a constant that continued to accumulate. The correspondence from both Mr

Cartade, and Mr Wong Ken, at their respective stints as managing director, shows them

attempting to placate the consortium of bankers to whom WCC was indebted.

[154] In so far as competition was concerned, it has already been pointed out that

WCC was misguided to think that it was entitled to a monopoly in the supply of

quicklime. It bears repeating also that RJLML did not commence production of quicklime

until June 2000. WCC is therefore incorrect in saying that the absence of the Jamalco

contract denied it any breathing space to allow it to get over its teething pains and

establish itself as a competitive entity.

[155] The learned trial judge was entitled to find that WCCs debt burden was a major

factor in its being unable to produce a competitively priced product.

[156] With regard to the cancellation of the quicklime contract by Jamalco, Lord Gifford

correctly pointed out that the contracts between Jamalco and WCC were short-term
arrangements. The learned trial judge did point out, however, that WCC had, prior to

commencing production, declined a long term contract with Jamalco. Although Lord

Gifford submitted that this was, in fact, an offer for a short term contract, it is more

likely that the offer was for a long term contract in the light of the fact that WCC was

not yet in a position to produce quicklime. WCC was probably correct in declining a long

term contract in July 1996, but the significance of Jamalcos offer at that time was that

it was prepared to offer a long term contract to any local supplier that could provide it

with quicklime, even if the supplier was not yet ready to manufacture the product.

RJLML was prepared to take the risk that WCC declined. It was better suited, because

of its association with Rugby, to take that risk. Rugby had the capability to import the

product pending the commissioning of RJLMLs plant in Jamaica.

[157] The learned judge is correct in saying that the loss of Jamalco as a major

customer was an important blow to WCC. Jamalco was taking almost all of WCCs entire

production up to October 1997, and at that time was the only alumina company that

had made modifications for receiving WCCs deliveries. It is also true to say that

Jamalcos custom was lost because of the efforts of CLCL/Rugby. Those were not,

however, due to any improper efforts by Mr Clarke, Dr Lawrence or NIBJ. The learned

trial judge accepted that it was Jamalcos management that negotiated the quicklime

contract with CLCL/Rugby and not Jamalcos executive committee, of which Dr

Lawrence was a part.

[158] The various mishaps at WCCs factory and with its employees was the next factor

that WCC criticised as being inappropriately ascribed as a reason for its failure. Lord

Gifford argued that those mishaps did not justify a conclusion that the unlawful acts of

the respondents had no causal connection to the disastrous loss suffered by [WCC]

(paragraph 97 of the speaking notes).

[159] Lord Giffords submissions ignored the context in which these incidents and

accidents occurred. Whether it be the failure of the plant after the first day of

production, 1 May 1997, injury to workers because of inappropriate gear, closing of the

plant for breaches of the Factories Act, incapacity of the production manager due to a

motor vehicle crash, or the flooding of the plant due to heavy rainfall, all these

interruptions to production, sometimes for extended periods, meant that there was no

income from sales. All this was while the debt resulting from the short-term loans

continued to increase. The cost of servicing the debt became a significant factor for the

pricing of its product. Without the massive injection of capital, of which the learned

trial judge spoke, it would not have been possible for WCC to sell its quicklime at a

price at which it could compete, and yet remain viable.

[160] The learned trial judges assessment of the reasons for WCCs failure was sound.

Ground 18 should fail.

Grounds 19 - 25 WCCs response to information of competition from CLCL

[161] WCC argued, in respect of these grounds, that the learned trial judge ignored Mr

Wong Kens evidence that, had he known of the kind of competition facing WCC, he
would have cut his losses and sold out or he would have sought a joint venture

partner. Lord Gifford argued that where a breach of fiduciary duty occurs, the party in

breach cannot be heard to say that the innocent party would not have changed course

if he had known of the breach. In support of his submissions, Learned Queens Counsel

relied on United Pan-Europe Communications NV v Deutsche Bank AG [2000] 2

BCLC 461 and London Loan & Savings Co of Canada v Brickenden [1934] 3 DLR

465.

[162] Lord Gifford cited the following extract from paragraph 16 of London Loan &

Savings Co of Canada v Brickenden in support of his submissions:

When a party, holding a fiduciary relationship, commits a

breach of his duty by non-disclosure of material facts, which
his constituent is entitled to know in connection with the
transaction, he cannot be heard to maintain that disclosure
wound not have altered the decision to proceed with the
transaction, because the constituents action would be solely
determined by some other factor, such as the valuation by
another party of the property proposed to be mortgaged.
Once the Court has determined that the non-disclosed facts
were material, speculation as to what course the
constituent, on disclosure, would have taken is not
relevant. (Emphasis supplied)

[163] The evidence from Mr Wong Ken in this regard may be found at volume A, tab

A, pages 218-219, or alternatively, at volume A, tab B pages 23-24 of the record of

appeal. Mr Wong Ken, in his evidence in chief, stated that he did not know, prior to

WCC applying to NIBJ for financing, that NIBJ had invested in CLCL. The exchange

concerning his alternative to taking that financing continued thus:

 A. Well, for start we certainly would not have taken money
from NIBJ, whatever else we did would have required
serious thinking.

Q. Serious thinking?

A. Yes, the market was very small and we didnt think that
the market could tolerate two parts [sic] I certainly would
not have gone into competition against such a well funded
company with persons of such powerful stature in Jamaica,
that would be suicide. These guys sat on my market.

Q. So, this page [of NIBJs annual report 1995-1996] makes

reference to investment of NIBJ in Clarendon Lime. If you
had discovered the identities of all the participants in
Clarendon Lime, how would that affect your position?

A. In 1996, well as I said, we certainly would not have taken

any money from NIBJ, we would have had to consider the
options open to the company at the time. Thinking about it
now it might have the projection of selling out cheaply to
try to find a joint venture partner, it is difficult to say now.
One thing is clear we would not have gone to NIBJ for
money.

[164] The contemporary documentary evidence and evidence of events occurring

subsequently do not support Mr Wong Kens evidence at the trial. It is beyond question

that WCC was in serious debt at the time of the first application to NIBJ. The suppliers

of the conveyors, FMC, and the supplier of the kiln, Fercalex, were owed money and

requiring payment. In fact, it seems that FMC were threatening court action at the time

of WCCs first application to NIBJ. Mr Wong Ken agreed in cross-examination that

WCCs need for cash was urgent (volume A, tab A, page 148 of the record of appeal)

and the need for disbursement of the financing was critical (volume A, tab A, pages

163-4).
[165] Subsequent events also undermine Mr Wong Kens testimony. His evidence was

that he learned of NIBJs involvement in CLCL in July 1998. He was by then the

managing director of WCC. Despite that knowledge, WCC continued its relationship with

NIBJ. It applied for and accepted further funding from NIBJ on two subsequent

occasions. Mr Wong Ken, at a later date, also expressed confidence in the

professionalism of the NIBJs officers. He stated this in a letter dated 28 April 2000:

We have noted [the comments of NIBJs director of portfolio

management Mrs Portia Nicholson-Clarke in a letter dated 13
April 2000] regarding confidentiality. We have the highest
regard for Mrs. Wynter and Ms. Gayle and believe that they
discharge their duties in a highly ethical and professional
manner. (Volume 4 page 426 of the record of appeal)

It is true, however, that he had expressed concern to Mrs Wynter about the situation. It

was his expression of that concern that led to Mrs Nicholson-Clarke to write to him

concerning the issue of confidentiality. The minutes of the February 1999 board

meeting of WCC reveals that Mr Wong Ken had been assured that Dr Lawrence would

not deliberate on WCCs matters (volume 4 page 390 of the record of appeal).

[166] In a letter dated 13 May 2002, Mr Wong Ken re-affirmed his satisfaction with the

integrity of NIBJs officers (see volume 5, tab A, page 250 of the record of appeal).

[167] Whether WCC would have taken the first loan, had it known of NIBJs

involvement with CLCL, may well be speculation, and as a result, NIBJ could not

properly suggest that WCC would have gone ahead nonetheless. The issue, however, is
whether WCC suffered any loss as a result of the breach of the fiduciary duty. That

question has already been answered in the negative.

[168] Lord Gifford, in respect of these grounds, submitted that NIBJ led WCC into a

debt trap, leading to its being put into receivership. The evidence, however, is that in

respect of the first loan, WCC was already indebted to its suppliers and financiers, and

the NIBJ financing was used to settle those debts. There was therefore no, or very

little, increase in WCCs overall indebtedness as a result of this tranche of the financing.

The second tranche of funding was not granted with a view to supplying Jamalco, but

rather Alcan, whose Kirkvine plant could not accommodate the size of the quicklime

that WCC was producing. There was also an element of the funding which was required

to pay for a weigh scale and a dump truck, which would have improved WCCs general

efficiency. There was an increase of indebtedness as a result of this tranche of

financing but with a view to broadening the acceptability of the product. It was WCCs

inability to make use of the equipment that it had acquired, that resulted in its failure to

generate increased income from that increase in its debt stock.

[169] In light of the finding in respect of causation these grounds should also fail.

Grounds 26 - 28 claim for damages

[170] In these grounds, WCC concludes its position in respect of its previous grounds

of appeal and argues that the learned trial judge ought to have awarded damages for

misfeasance in public office, conspiracy to injure and breach of fiduciary duty. Lord
Gifford submitted that, if WCC were successful in this appeal, the case would have had

to be remitted to the Supreme Court for damages to be assessed.

[171] Based on the conclusions reached in this judgment there would be no reason to

overturn the learned trial judges judgement and consequently, no reason to order any

assessment of damages to be conducted.

Conspiracy to injure WCC in its business

[172] There are two points to be made concerning WCCs allegations of a conspiracy to

injure it in its business. The first point is, as the learned trial judge pointed out, there

was no proof of a conspiracy. There was no evidence of any agreement between any of

the respondents to injure WCC.

[173] The second point is that the suggestion was that the conspiracy was hatched in

1995. This was before there was any indication of WCC as a force in the production of

quicklime. At the time of CLCLs incorporation, WCC did not even have a kiln in place

and NIBJ had had no relationship with WCC. The learned judge pointed out why the

allegation of a conspiracy was unsound. He said at paragraph [212] of his judgment as

follows:

[Counsel for WCC] submitted that the conspiracy consisted

of agreeing to build a lime plant to supply quicklime to the
bauxite companies. This was said to be an agreement to do
a lawful act (construct the quicklime plant) by unlawful
means (misfeasance in public office and breach of fiduciary
duty). The submission is that unlawful means were used.
This conspiracy was said to have been formed in 1995.
Since this court has concluded that NIBJ and Dr
Lawrence did not commit the tort of misfeasance in
 public office then a conspiracy of the form alleged by
WCC did not occur. (Emphasis supplied]

And again at paragraph [215]:

The evidence relied on to ground the conspiracy is the

same as that used in the tort of misfeasance in public office
and breach of fiduciary duty. From what has been said
above this court has concluded that neither Dr Lawrence nor
NIBJ was part of any conspiracy to injure WCC. In addition,
there is no causal connection between the defendants
conduct and WCCs loss.

In the light of the evidence, the learned trial judge cannot be faulted for his findings.

Conclusion

[174] The conclusion to this long, and long delayed (which delay is sincerely

regretted) judgment is that the appeal should be dismissed. The learned trial judge was

correct in finding that there was no proof of misfeasance in public office on the part of

any of the respondents. As the alleged acts of misfeasance were also the acts said to be

in proof of a conspiracy to injure WCC in its business, the claim of a conspiracy was also

properly dismissed.

[175] The learned trial judge made two additional findings that were adverse to one or

other of the respondents. Firstly, he found that Mr Clarke had misused his public office

in allowing his company, Licojam, to seek and acquire public funding for the creation of

CLCL, without having first disclosed his interest to the Prime Minister and the Cabinet

and having obtained approval for that investment in that context. Ms Clarke is correct in

her assertion that that issue was not one that had been properly joined between the

parties so as to allow the learned trial judge to make that finding. On that basis her
counter-notice of appeal should succeed. Having said so, however, the learned trial

judges disquiet about the circumstances was quite understandable. There should be no

costs awarded on the counter-notice of appeal in the circumstances.

[176] The second finding was adverse to NIBJ. The learned trial judge ruled that NIBJ

had breached its fiduciary duty when it had representatives on the boards of competing

companies, without disclosing, at least to WCC, that it was so connected. He was, with

respect, correct in his finding in that regard. He was also correct in finding that as a

director of WCC, NIBJ owed a duty to that company to inform it of the defects in its

pricing strategy.

[177] Based on those conclusions, the orders should be:

1. Appeal dismissed.

2. Counter-notice of appeal allowed.

3. Costs of the appeal to the respondents to be agreed or taxed.

4. No order as to costs on the counter-notice of appeal.

PANTON P

ORDER

1. Appeal dismissed.

2. By majority (Panton P dissenting) Counter-notice of appeal

allowed.

3. Costs of the appeal to the respondents to be agreed or taxed.

4. By majority (Panton P dissenting) no order as to costs on the

counter-notice of appeal.